Universal Music Group and Deezer partner to investigate music streaming payout reforms
Deezer and Universal Music formally announce partnership to explore ways to make the music streaming royalties system fairer for artists.
Deezer and Universal Music Group have officially joined together to investigate new economic models for music streaming and find a fairer way to pay artists and songwriters. This comes after Universal pledged to work with TIDAL on remuneration alternatives in streaming.
Announcing the artist-centric initiative, the two companies stated they will look to work towards solving at the problem as a whole, with a broad scope that will seek to fix the whole ecosystem, not just sticking on random band-aids. As the two companies acknowledged, there is, however, no quick fix.
For a while now Deezer has been exploring different payment models for its artists, and has officially committed to pursuing user-centric payment systems in the future – meaning a user’s subscription money has a more direct route to the artists they actually listen to.
Why are streaming payouts so complicated? Streaming means that listeners can discover new music with a couple of clicks, and talented artists can get their tracks uploaded to Deezer and other platforms through distributors like RouteNote quicker and easier than ever before. But the music royalties system has not kept pace, stuck in the days of physical sales like CDs and vinyl.
CEO of Deezer, Jeronimo Folgueira, said: “As a key player in the music industry, we work with all labels to find ways to make the ecosystem fairer and help artists monetise their music better. The current system has clear issues that need to be addressed, such as increasing amounts of non-music tracks uploaded on platforms, poor quality covers with misspelt artists’ names and songs to “steal” streams, and people trying to trick the system with the length of tracks. This hurts true artists, makes it harder for new ones to emerge and also damages the fan experience.”
What will the alliance mean in practical terms? The partnership will use data to consider different options for economic models and the potential benefits for artists of all kinds of genres and in different locations globally.
On the listener side, a reimagining of Deezer’s user engagement model is also on the cards. There’ll be a focus on bringing artists and fans closer together, as well as the added bonus of increasing subscribers on Deezer. The data gathered will also inform future development of features on Deezer, such as its lyric translation tool and quizzes.
Folgueira said: “We believe in quality and fairness at Deezer and with this initiative together with UMG we will look into how we can improve the model to everyone’s benefit. Music is extremely undervalued today and as part of the artist-centric discussion we are keen to find additional ways of increasing monetisation, to the benefit of real artists, the labels and platforms like Deezer.”
Michael Nash, EVP, Chief Digital Officer at UMG said: “We’re thrilled to explore how we can evolve streaming for the benefit of the entire ecosystem of artists, labels, platforms and fans. Such collaboration is critical to the success of the Artist-Centric initiative. While there won’t be one uniform quick fix – subscriber acquisition and retention dynamics and metrics vary by platform – our partnership with Deezer will help accelerate this entire enterprise.”
Steps like the partnership between UMG and Deezer, despite it being very early days, are positive signs that the biggest players in the streaming game are serious about finding a solution to the economics of streaming issue.