A Model That Needs Fixing

The way streaming pays artists today is built to serve everyone except the people making the music. The payment chain is bloated with middlemen who all take a cut before anything reaches the artist. Major labels, publishers, distributors, and rights organizations have designed a system that protects their positions and locks in their share of revenue.

Beyond that, payouts are often delayed for months, leaving artists waiting while money filters through various parties. And even when payments do finally arrive, the streaming model's reliance on pooled royalty payouts means the money artists receive often has little to do with how many times their fans actually listened to their music.

The result is a structure that protects incumbents, hides where the money goes, and makes it nearly impossible for most independent artists to earn fairly from their own audience.

This post is about what happens when you rebuild that system with something entirely different, using the Lightning Network and Value for Value. The Lightning Network is the payment infrastructure that allows real-time micropayments across RSS feeds.

If you're new to the concept of open distribution, I highly recommend checking out the Fountain blog on Rethinking Music Distribution to dive deeper into how it works.

How the System Was Designed to Benefit the Majors

When streaming first launched, the major labels were quick to secure licensing deals that would protect their dominance. These deals allowed them to dictate how money flowed through the system, ensuring they captured revenue before anyone else. For platforms like Spotify, this was a tradeoff: they needed the major label catalogs to scale quickly and build user bases.

The result was a system built around gatekeeping and control. Instead of simplifying payments from listener to artist, the model inserted layers of intermediaries; labels, distributors, publishers, and collection societies, all with their own cuts and reporting systems. The payout structure prioritizes these organizations at every level.

For independent artists trying to build an audience, this system makes it extremely difficult to grow sustainable income, no matter how loyal their fans might be.

The Broken Logic of Stream Share

Streaming platforms like Spotify operate on a stream-share model. Every month, all subscription and ad revenue is collected into a single pool. That pool is then divided based on which songs received the most streams across the entire platform, not based on who each individual user listened to.

If a fan streams your track 100 times, that doesn't automatically increase the amount you receive. Your payout is determined by your share of total platform streams that month. The superstars at the top who rack up billions of plays capture a disproportionate share of the pool. Independent artists with dedicated, smaller audiences end up with very little, even if their listeners are highly engaged.

This model:>

• Disconnects fans from directly supporting the artists they care about
• Rewards mass scale and popularity over connection
• Makes it extremely difficult for emerging artists to earn sustainable income
• Protects incumbents who already dominate the top of the charts

It’s not a system designed to nurture creativity. It is designed to feed the top, maintain the power structure, and limit upside for everyone else.

The Delay Problem

Even once payouts are calculated, artists still wait weeks or even months to receive what they’ve earned. Distributors often operate on 60 to 90-day payout cycles, adding more delay on top of an already complex system.

This isn’t a technology issue. Platforms can track streams in real-time. The delays exist because of how payments have historically been processed and how many parties are involved in collecting their share before anything reaches the artist.

While streaming services pull in revenue daily, the artists who generate the streams sit at the very end of the line.

How Lightning Unlocks Real-Time Royalties

Now imagine something entirely different.

A fan listens to your song on an app like Fountain. While they listen, small payments, called sats (tiny fractions of Bitcoin), are sent to you right away. There’s no waiting, no complicated royalty system, and no middlemen. You get paid directly, in real-time, as people play your music.

This is the core of Value for Value. The fan decides what your music is worth to them and supports you directly. Unlike platforms like Spotify, where the stream rate is fixed by how much ad revenue and subscribers the platform collects globally, Value for Value allows each listener to pay based on the value they feel they’ve received.

Some people may choose to send small amounts. Others may choose to contribute more depending on the connection they feel with your work. The point is that value moves directly from listener to artist without being filtered or diluted along the way.

Boosts: Another Layer of Direct Support

In addition to automatic payments while streaming, apps like Fountain also let fans send boosts. A boost is simply a one-off payment a listener can send while listening. A way to say "I really value this" at a particular moment. It adds another layer of direct interaction between fan and artist that traditional platforms do not offer.

Boosts are optional, voluntary, and entirely fan-driven. They give the listener more agency and give the artist another form of direct support.