Pro rata is a Latin adverb or adjective meaning a proportionate allocation.
When services calculate streaming royalties to licensors on a pro rata basis, it usually means allocating earnings to each licensor according to its share of a pool of total earnings.
However, licensors of content that attracts the most
profitable per-stream users are apt to find such standard pro-rata methodology to
be unfair and may favor user-centric royalty calculations instead of those that
are pool-based. In a user-centric calculation, a streaming service instead
pro-rates earnings from each individual user to the relevant licensors and does
not first pool earnings matched to individual users.
Pro rata calculations can be used to determine the proportionate
shares of any given whole and it is often used in business finance.
