Last week, Deezer announced the launch of a new ‘artist-centric’ streaming model, created in tandem with Universal Music Group. The model is designed, according to Deezer, “to better reward the artists, and the music that fans value the most”.
Today (September 11), Believe – like Deezer, a Paris-headquartered company – has issued its response to the news.
Believe expresses some applause for the model – but also expresses some concerns.
Deezer’s new ‘artist-centric’ payout model, which launches in France next month, is characterized by three main changes:
- Artists who attract over 1,000 listens a month (from over 500 unique listeners) on Deezer will get a “double boost” in their streams on the service. This will double the ‘market share’ of plays their music receives when the royalty pool is divided and paid out;
- This ‘double boost’ will double again (i.e. X4 weighting) if a play of said artist’s music has also been actively searched for by listeners vs. being algorithmically served to them;
- Deezer says it plans to “replace non-artist noise content” on its platform with its own Deezer-made “content in the functional music space”. This looks like it may involve the complete removal of millions of tracks from Deezer’s current catalog (approximate size: 200m tracks). Deezer then won’t pay itself any royalties when users play its first-party “functional music” tracks – bulking up the overall royalty pool for everyone else.
In addition, though not strictly part of the royalty model changes, Deezer has promised to take a harsher line on streaming fraud, including the continuing refinement of a “stricter, proprietary fraud detection system”.
Believe said today in a press release that it supports the Deezer/UMG news on two fronts: (i) That it will see Deezer “stepping up its operational efforts to eliminate streaming fraud and streaming abuse”; and (ii) That “non-music content and specific elements of functional music [will be excluded] from the calculation of the music royalty pool for artists”.
However, Believe, which trades on the Euronext in Paris and owns the DIY distribution platform TuneCore, has questioned the impact that the other key elements of the ‘artist-centric’ model – i.e. the doubling of stream counts for certain music – will have on the revenues of newer artists.
“As a company working with artists and labels at all levels, Believe considers that all artists shall be compensated equally by streaming services regardless of their stage of development.”
Believe statement issued today (September 11) in response to Deezer/UMG’s ‘artist-centric’ announcement
According to Believe, under the new Deezer model, “artists generating fewer than 1,000 streams per month by less than 500 unique listeners would be remunerated at a significantly lower rate than artists above the threshold”
Believe’s key concern, though, is over the future, and “the risk that those [1,000 stream/500 listener] thresholds would be raised over time, affecting progressively more and more artists”.
(To be clear: As things stand in Deezer’s UMG-informed model, only artists with fewer than 1,000 monthly streams and/or fewer than 500 unique monthly listeners will be ‘punished’ by missing out on the 2X “double boost”. However, as MBW has pointed out, Deezer and UMG have stated that they reserve the right to tweak Deezer’s formula in future, begging the question of whether that 1,000 listens/500 listeners threshold might be raised in the months and years ahead.)
Crucially, Believe commented today: “As a company working with artists and labels at all levels, Believe considers that all artists shall be compensated equally by streaming services regardless of their stage of development.
“We strongly oppose an unfair ‘reverse Robin Hood’ system that is centered around taking compensation from rising artists to allocate it to top and established artists.
“Further, it is our belief, based on data, that such a system would reduce diversity and discourage creativity.”
“We do not think it is right to trade less diversity for better economics, nor for top artists to take away revenue from emerging acts.”
Denis Ladegaillerie, Believe
Commenting further today, Denis Ladegaillerie, Founder & CEO, Believe, said: “Right now, the debate about ‘value-sharing’ does not exist.
“Instead, we are experiencing commercial negotiations to lower the market share of all independent artists. We do not think it is right to trade less diversity for better economics, nor for top artists to take away revenue from emerging acts.”
Believe says it will continue its ongoing work with Deezer, global digital music partners and other industry stakeholders “to explore the best foundation to build an equitable new streaming model for all artists”.
Last week, in making the announcement alongside UMG, Jeronimo Folgueira, CEO of Deezer said: “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.
“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 favorite artist streamed in HiFi.”
“As the ever-evolving music landscape continues its rapid transformation, UMG and Deezer will rigorously address the impact of these changes as we incorporate new insights from data analysis, and fine-tune the model, as appropriate.”
Michael Nash, Universal Music Group
Michael Nash, UMG’s EVP and Chief Digital Officer, said: “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.”
He continued: “Embracing the commonly shared objectives we highlighted at the outset of this chapter in our partnership, together we’ll maintain a flexible and adaptive approach.
“As the ever-evolving music landscape continues its rapid transformation, UMG and Deezer will rigorously address the impact of these changes as we incorporate new insights from data analysis, and fine-tune the model, as appropriate.”Music Business Worldwide