What does User-Centric Model mean in the music industry?

An alternative streaming payment model where a listener's subscription fee goes only to the specific artists they actually listened to that month.

User-Centric Model Definition | Music Industry Glossary

In-Depth Explanation

The User-Centric Payment System (UCPS) is an alternative method for distributing streaming royalties where a listener's subscription fee is divided exclusively among the artists they actually listened to that month. Under the current industry standard (the pro-rata model), all subscription money is pooled and paid out based on total global stream share. Under UCPS, the money is never pooled. Your $10 monthly fee goes only to the artists you chose to play.

How the User-Centric Model Works

Under the pro-rata model, a streaming platform collects all subscription revenue into one pool, then divides it based on each artist's share of total streams. If Drake accounts for 5% of all streams on the platform, Drake's catalog receives 5% of the total pool. This means a portion of your personal subscription fee flows to artists you never listened to.

Under the user-centric model, each subscriber's fee is its own mini-pool. If you pay $10.99 per month for Spotify and only listen to one indie rock band for the entire month, that band receives your entire subscription fee (minus the platform's approximately 30% cut). A pop superstar you never played gets zero dollars from you.

The model changes the economics of fandom. An artist with 500 devoted listeners who stream nothing else earns more per stream than an artist with 50,000 casual listeners who play one track and move on. The system rewards depth of engagement over breadth of reach.

Arguments in Favor

Eliminates the superstar subsidy: Under pro-rata, a jazz fan's subscription fee partially flows to pop stars simply because those stars command the largest market share. UCPS ensures your money only supports the art you consume.
Rewards deep fan engagement: An artist with a small but dedicated fanbase captures 100% of those listeners' subscription fees instead of competing for a sliver of a global pool.
Reduces streaming fraud: Under pro-rata, bot farms generate fake streams to steal a larger percentage of the shared pool. Under UCPS, a bot account can only siphon its own $10.99 subscription fee, destroying the financial incentive for fraud at scale.

Arguments Against

Major label resistance: Universal, Sony, and Warner benefit from pro-rata because their catalogs generate the most total streams. Shifting to UCPS could redistribute revenue away from top 40 hits toward niche and independent artists.
Data processing costs: Calculating royalties per-user per-month requires significantly more computing power than dividing one global pool. Platforms argue the administrative overhead may offset gains to artists.
Revenue uncertainty: A 2023 study by Pro Musik surveying 50,300 SoundCloud artist profiles found that 29.3% of artists would see income increases of 40% or more under UCPS, but 38.8% would see decreases of 40% or more. The model creates winners and losers, and not every independent artist benefits.

Real-World Example

SoundCloud launched Fan-Powered Royalties in 2021, becoming the first major platform to implement a user-centric model. Independent artists who monetize directly through SoundCloud receive payments based on which specific listeners streamed their music.

By 2024, SoundCloud reported that 56% of artists in the Fan-Powered Royalties program earned more than they would have under pro-rata. Warner Music Group and Merlin (representing thousands of independent labels) opted into the system. SoundCloud's per-stream rate for engaged listeners ranges from $0.005 to $0.012, compared to Spotify's pro-rata rate of approximately $0.003 to $0.005 per stream.

In November 2025, SoundCloud overhauled its creator subscription model. Artist Pro subscribers ($99 per year) now keep 100% of royalties from distribution to Spotify, Apple Music, TikTok, and 60+ other DSPs, while Fan-Powered Royalties continue to govern on-platform SoundCloud streams. The company also added direct fan support with zero commission, allowing fans to donate $1 to $1,000 directly to artists.

Deezer has also tested user-centric payment models in Europe, partnering with Universal Music Group in 2023 on an artist-centric approach that combines elements of UCPS with quality-based weighting. However, a full global rollout across all major labels has not yet materialized.

Why It Matters for Independent Artists

If you distribute music through SoundCloud and have a loyal listener base there, Fan-Powered Royalties can significantly increase your per-stream earnings. Artists with engaged SoundCloud audiences routinely see 2x to 4x the per-stream payout compared to Spotify's pro-rata model.

The model has not been adopted by Spotify, Apple Music, or Amazon Music. For most independent artists, pro-rata remains the system that governs your streaming revenue on those platforms. Use our Streaming Royalty Calculator to estimate your earnings under the current pro-rata system. Understanding the difference between these models helps you decide where to focus your promotional efforts and which platforms offer the best return for your specific fan engagement pattern.