Answers/Glossary/User-centric allocation
Glossary · Royalties
User-centric allocation
User-centric allocation is a streaming royalty model that divides each listener's own subscription fee among the artists that listener actually played, instead of pooling all subscriber money and splitting it by total stream share. SoundCloud uses a version of it.
User-centric allocation replaces the pooled denominator of pro-rata with a personal one. Instead of every subscriber's payment landing in one pot that gets divided by total platform streams, each subscriber's fee is treated as their own budget and split among the artists that particular person listened to that month.
The case that motivates the whole argument is the devoted listener. Someone who plays one niche record on repeat all month sends, under user-centric, effectively their entire month's fee to that one artist. Under pro-rata, that same person's money goes into a pool dominated by the platform's largest tracks, and the niche artist receives a share proportional to a sliver of global stream volume.
| Pro-rata | User-centric | |
|---|---|---|
| Denominator | Total streams in the market | That listener's own streams |
| Superfan effect | Diluted into the general pool | Flows to the artists that fan plays |
| Stream farms elsewhere | Dilute everyone | Contained to those accounts |
| Reporting cost | One calculation per market | One calculation per listener |
SoundCloud launched fan-powered royalties in 2021 for its own monetised artists. Deezer, with Universal Music Group, has pushed an artist-centric variant that reweights the pool rather than fully personalising it. Spotify, Apple Music and Amazon Music remain pro-rata.
The misunderstanding is treating user-centric as an imminent reform. It is not. Understand it because it explains why your rate behaves the way it does, not because you should plan a release around it arriving.
I make music and study the payout math; nothing here is investment or legal advice.
Related terms
- Pro-rata allocationPro-rata allocation is the method streaming services use to divide royalties: all revenue in a market and month is pooled, a…
- Royalty poolA royalty pool is the total sum of money a streaming service sets aside for rights holders in a given market and month, before it…
- Per-stream rateA per-stream rate is the average amount a recording earned per play, calculated after the fact by dividing royalties received by…
- DSP (digital service provider)A DSP, digital service provider, is a streaming service or download store that licenses and delivers music to consumers —…
Definitions on this site describe the United States system. I am an artist who has been through this, not a lawyer.
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