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THE SCOOP | Universal Music Group And Deezer Set Out To Shake Up Music Streaming With Artist-Centric Royalty Model

By Anya Wassenberg on September 6, 2023

Music streaming revenue

Universal Music Group and streaming giant Deezer have teamed up to launch what they call an artist-centric royalty model for streaming music. The goal is to be able to pay artists better, while adding to the listener experience.

The new royalty model will launch on Deezer in France in the last quarter of 2023. Additional markets are expected to follow. The move is based on the analysis of data from both companies.

The Issue: Too Much Volume

According to industry sources, upwards of 100,000 tracks are uploaded to Spotify alone every single day.

Every. Single. Day.

That’s a tsunami of new music, and one of the reasons why music industry experts say that streaming rates are notoriously low. With so much music out there, how could they be anything but?

Add the various ways that streaming services and playlists can be manipulated, and it creates a chaotic situation at best. That’s the situation the UMG initiative aims to address.

The Details

Paying artists more is the goal, and it’s one that is long overdue. However, it’s not an effect that’s going to be applied across the board. That’s an important distinction, according to UMG.

“The goal of the artist centric model is to mitigate dynamics that risk drowning music in a sea of noise and to ensure we are better supporting and rewarding artists at all stages of their careers whether they have 1000 fans or 100 thousand or 100 million. With this multi-faceted approach, music by artists that attracts and engages fans will receive weighting that better recognizes its value, and the fraud and gaming, which serves only to deprive artists their due compensation, will be aggressively addressed,” said Michael Nash, UMG’s EVP and Chief Digital Officer in a company statement.

Deezer’s catalogue has grown from 90 to more than 200 million tracks in the last two years. What they call “content clutter” is making it confusing and cumbrous for fans, particularly when it comes to finding new artists they would enjoy.

The company’s data dive reveals what anyone would have suspected: people consume the vast majority of their music by the artists they love, and very, very few of that endless supply of new tracks will get significant listenership — supply, in other words, has far outstripped demand.

This is what they’ll do:

  • Deezer defines the category of professional musicians: more than 1,000 streams per month & more than 500 unique listeners;
  • According to Deezer’s data, that situation would apply to only about 2% of the all the uploaders on the platform now;
  • They’ll attribute a double boost in income to those artists;
  • They’ll also add that same double boost for individual songs that are getting a lot of attention;
  • Demonetize what they call non-artist noise audio, which they’ll replace with their own functional music (not part of the royalty pool);
  • Deal more comprehensively with fraud, and applying a stricter policy of quality control.

Universal and Deezer will continue development of Deezer’s fraud detection tools and AI detection.

A Changing Musical Landscape

“This is the most ambitious change to the economic model since the creation of music streaming and a change that will support the creation of high-quality content in the years to come,” said Jeronimo Folgueira, CEO of Deezer in a statement.

“At Deezer we always put music first, providing a high-quality experience for fans and championing fairness in the industry. We are now embracing a necessary change, to better reflect the value of each piece of content and eliminate all wrong incentives, to protect and support artists. There is no other industry where all content is valued the same, and it should be obvious to everyone that the sound of rain or a washing machine is not as valuable as a song from your favourite artist streamed in HiFi.”

According to French media, the deal represents something of a compromise for Deezer, which had initially looked to give smaller artists a bigger slice of the pie too.

Olivier Nusse, CEO of Universal Music France, comments in a statement, “After extensive engagement with Deezer throughout 2023, we are very proud to be pioneers in France in the highly anticipated roll out of their version of the Artist Centric model. This comprehensive initiative will much more effectively value fan engagement and active streaming of music created by artists.”


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