Following the Universal and Deezer deal announcement of their new 'artist-centric' model, many have shared their opinions - not always positive - shedding light on the remaining challenges that still need to be addressed.
Earlier this month, Universal and Deezer announced a groundbreaking deal: an ‘artist-centric’ model that will boost artists’ and songwriters’ streaming earnings. Initially to be implemented in France from this October, the model is expected to go global in 2024.
So what is the deal exactly? In a nutshell, the French DSP has agreed to double the weight allocated to the volume of streams when calculating each artists’/labels’ earnings, potentially increasing them by 10%. This ‘double boost’ will also be applied to tracks actively searched for by Deezer users. But not everyone making music will see their income rise. Only UMG-signed artists with more than 1,000 streams per month and a minimum of 500 unique listeners are allowed to reap the benefits of the deal.
Up to this point, all DSPs have valued each stream equally, regardless of whether it’s a Taylor Swift song or an amateur sound recording of the rain. Earnings have typically been determined by the total number of streams each track has. “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,” Jeronimo Folgueira, Deezer CEO, said in the press release.
To balance things out, the model also includes measures to demonetise ‘non-artistic noise audio’, such as white noise, nature sounds, AI-generated audio, among others. All this ‘noise’ content is expected to be replaced by the platform’s own ‘functional music’, which will be excluded from the artists’ royalty pool.
In the last few years, streaming platforms have witnessed a boom in ‘noise audio’ uploads, leading to an erosion of the earnings that artists, songwriters and publishers have been entitled to. This deal could be the beginning of the end of a long-lasting battle between publishers and streaming platforms to reward real artists while simultaneously limiting the access to non-artist music.
At least, this seems to be the case for the music majors. With big stars and popular tracks under their belt, they have a lot to gain if such deals are widely adopted across the industry. But where do independents stand?
On Spotify, majors have witnessed a market share decrease every single year since 2017. In contrast, independent labels and self-releasing artists have seen their recorded music share rise over the years.
MIDiA reported that in 2022, self-releasing artists held 5.7% of market share worldwide, whereas in 2015, that value was only 1.7%. Many argue this is also the outcome of a shift in perception around artists’ careers. Today, deals with record labels are seen as one way to succeed, rather than the only way, as it was believed a few years ago, driving artists to release music on their own.
AIM, the UK indie music body, congratulated the platform’s intentions of reframing the economics of streaming, but highlighted some of the consequences that can emerge from the model’s incentives. Silvia Montello, AIM’s CEO, condemned the requirements to be entitled to the ‘double boost’ – not attainable for most indie artists – and explained that a royalty boost enjoyed by only a few can lead to a two-tier system.
Believe and IMPALA also voiced their dislike for an ‘artist-centric’ model that only benefits a small portion, setting a ‘reverse Robin Hood system’, as Believe called it. They are afraid that this model will further penalise indie musicians who, in many instances, already struggle to make a living. Needless to say, the deal falls short of the 10-point plan to reform music streaming IMPALA released a couple of years ago.
These organisations’ criticism is rooted in the fact that the ‘artist-centric’ model is the outcome of a two-party deal, rather than an industry-wide collaboration. Universal managed to secure its interests, manipulating the deal to its own benefit, but ultimately leaving the majority of the industry behind.
Following the announcement, music business seniors began to question whether the royalties to be paid by Deezer could exceed 100% of the royalty pool collected. Universal promptly responded, stating that it would be impossible, and that the model only modifies the way the money is allocated. Similarly to the current pro-rata model, the total amount of royalties distributed remains equal to the royalty pool, meaning that only some stakeholders’ earnings will change.
While Universal might have been the first to have its needs addressed, there is still a huge question mark on how future deals will address the challenges faced by independent labels, self-releasing and emerging musicians.