A musician pours their heart into an album. A filmmaker crafts a masterpiece for years. A content creator builds a loyal audience with engaging videos. But when royalty payments arrive, they’re barely enough for a coffee. Meanwhile, the platform thrives with record profits, and consumers enjoy unlimited access for the cost of a meal. Is there an imbalance in streaming platforms’ prices?

 

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This isn’t just an artist problem—it’s a platform problem. Streaming services like Spotify, Apple Music, and Netflix depend on content. Without creators, they have no business. Yet, pricing often prioritises subscriber growth over fair compensation for creators. To ensure long-term success, platforms must rethink their pricing and payment models to benefit both users and creators.

 

Streaming Platforms Prices for Growth at the Cost of Sustainability

 

Most streaming platforms focus on one goal when setting prices: growing their user base. The more users they attract, the more valuable they become. This often leads to low subscription fees or even free-tier models supported by ads. While this works for user acquisition, it doesn’t always ensure profitability or fairness.

 

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Take Spotify’s ad-supported tier. Users get free access to music, but artists receive just a fraction of a cent per stream. A song needs millions of plays before an artist sees meaningful income. Video platforms face similar issues, where revenue relies on ad impressions or low-cost subscriptions. The model works for the platform, but creators often feel squeezed.

 

Meanwhile, consumers expect affordability and variety. Many assume streaming platforms subscription prices directly supports the artists they enjoy, but the truth is more complicated. Revenue is pooled, and payout structures favour top-performing content. Smaller artists struggle to earn, even with loyal listeners.

 

What Platforms Can Do Differently With Their Streaming Prices

 

There’s a middle ground—streaming platforms prices that satisfy consumers while ensuring fair creator compensation. Here’s how platforms can get it right:

 

1. Value-Based Streaming Platforms Prices That Balance Stakeholder Needs

 

Platforms should move away from a one-size-fits-all pricing model. Instead, they can adopt value-based pricing, where fees reflect user engagement, content demand, and creator fairness. For example:

 

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  • Charge more for heavy users while keeping subscriptions affordable for casual ones.
  • Allocate payments to ensure artists are compensated fairly based on content popularity.
  • Offer direct support options, allowing subscribers to contribute more to their favourite creators, ensuring smaller artists have access to sustainable revenue.

This approach lets businesses stay profitable while ensuring a more balanced system that benefits both creators and users.

 

2. Fairer Royalty and Payment Structure for Artists

 

Rather than lumping all revenue together, platforms can shift to a user-centric payout model. Under this system, each subscriber’s fee is split among the artists they listen to. This ensures that niche and emerging artists receive fairer compensation based on their actual audience.

 

 

3. Transparent Sharing of Streaming Revenues 

 

Consumers are more likely to pay when they know their money supports creators. Platforms should make revenue distribution clearer. Allowing users to see how their subscription fees are allocated—perhaps even letting them choose where part of their fee goes—can build trust and increase engagement.

 

4. Partnerships That Put Creators First

 

Some platforms already allow direct artist deals, where musicians upload content and earn without intermediaries. Expanding these opportunities gives creators more control over their earnings. Platforms should refine and expand such models to ensure fairness and transparency.

 

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What if Content Platforms Don’t Adapt Their Strategy?

 

If streaming services ignore this pricing dilemma, they risk losing both artists and subscribers. Independent artists may seek alternative distribution models, cutting out platforms. Consumer loyalty could wane if they feel creators are being exploited. Worse, regulators might step in, forcing changes that don’t align with long-term strategies.

 

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The Path Towards Sustainable Streaming Platforms Prices

 

Streaming isn’t going away. Consumers love the convenience, and platforms drive immense value. But it’s time to rethink the economics. Fairer streaming platforms prices, better revenue distribution, and greater transparency will help platforms grow sustainably while supporting the creators who fuel their success.

 

For businesses running streaming platforms, success isn’t just about attracting users—it’s about keeping creators happy too. By addressing this pricing dilemma now, platforms can ensure streaming remains a win-win for everyone involved.

 

Ready to rethink your approach? Let’s talk about how you can implement fair, value-driven strategies that work for businesses, artists, and users alike.

 

For a comprehensive view of building a great pricing team to prevent loss in revenue, download a complimentary whitepaper on A Capability Framework for Pricing Teams.

 

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

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