Artist-Centric Royalty Distribution Platform

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Artist-Centric Royalty Distribution Platform

Inspired by a conversation on:

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Intrinsic Value Podcast - The Investor’s Podcast Network

TIVP039: Universal Music Group (UMG): Owning The World’s Music Catalog w/ Shawn O’Malley & Daniel Mahncke

Host: Shawn O’Malley & Daniel Mahncke

Timestamp: 42:02 - 43:30

Listen to Episode • View Podcast • All Ideas from The Intrinsic Value Podcast - The Investor’s Podcast Network

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Direct Quote

"There is an industry movement pushing for user-centric royalty models where each user's subscription fee is divided only among the artists they actually listen to."

Market Gap

Current royalty distribution models favor popular artists over niche creators.

The existing royalty distribution model in streaming platforms is pro-rata, which means that all subscription revenue is pooled and divided based on total streams. This model disadvantages niche artists whose fan bases may be smaller but are nonetheless dedicated. As a result, many talented musicians struggle to earn a fair income from streaming. The challenge lies in creating a system that rewards artists based on the actual engagement of their listeners rather than total streams, which can lead to a more equitable distribution of royalties. This is increasingly important as more independent artists seek to monetize their work without the backing of major labels.

Summary

The introduction of an artist-centric royalty distribution platform could revolutionize how royalties are allocated in the music streaming industry. By implementing a user-centric model, each listener's subscription fee would be divided only among the artists they actively engage with, ensuring that niche and emerging artists receive fair compensation for their work. This platform could leverage existing streaming services like Spotify or Apple Music to create a new revenue stream that aligns more closely with the interests of both fans and artists. The target audience for this platform would be independent artists and small record labels who are seeking more equitable monetization strategies. The opportunity lies in addressing the shortcomings of current models while fostering a more inclusive music ecosystem.

Categorization

Business Model
Platform
Target Founder
Subject Matter Expert
Difficulty
Medium
Time to Revenue
6-12 months
Initial Investment
$1,000-$10,000

Potential MRR (18-24 months)

Conservative
$5,000 - $10,000 MRR
Moderate (Most Likely)
$10,000 - $20,000 MRR
Optimistic
$20,000 - $40,000 MRR

* Estimates assume solo founder/bootstrap scenario with competent execution

Scores

Clarity
9/10
Novelty
8/10
Feasibility
6/10
Market Potential
7/10
Evidence
7/10
Overall
7.4/10
Found on September 28, 2025 • Analyzed on September 28, 2025 12:01 PM

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How should I validate this platform idea before building it?

2:34 PM

Great question! For a platform idea like this, I'd recommend starting with these validation steps:

  1. Customer interviews: Talk to Subject Matter Expert to understand their pain points
  2. MVP approach: Build a simple landing page to test demand
  3. Competitor analysis: Research existing solutions and identify gaps

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Yes, and what about the technical implementation? Should I build this myself or hire a team?

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Technical Strategy:

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Similar Ideas

Artist-Centric Royalty Distribution Tool

The business idea is to develop an artist-centric royalty distribution tool that utilizes a user-centric model for calculating royalties. This tool would track individual user listening habits and ensure that subscription fees are allocated to the artists they actually listen to, rather than pooled and distributed based on overall streams. By providing a more transparent and fair revenue-sharing model, this tool could benefit both emerging and established artists. Target customers would include independent artists, music labels, and streaming platforms looking to enhance their royalty systems and support the artists they work with. This tool could also create new relationships between artists and their fanbases, fostering community and loyalty.