Deezer and Universal are rethinking the music streaming compensation model

Posted Sep 6, 2023, 6:18 PM

Things are starting to change in the streaming economy. After six months of joint reflection on the streaming business model, the French platform Deezer and the major leader in the recorded music sector, Universal Music Group (UMG), are taking action.

In a press release published on Wednesday, they announce “the launch of a model of streaming artist-centric, designed to better reward the artists and music that fans enjoy the most.” It will first be launched by Deezer in France, in the fourth quarter of 2023, on Universal titles, before other markets follow in 2024.

“We are very proud that it is Deezer, in France, which is reinventing the streaming model, with the world number one, and in the interest of the industry, comments Stéphane Rougeot, deputy general manager of Deezer. We are also having discussions with all the labels, majors and independents, and hope that they will join us in this major development for the industry. »

Inflation of the number of titles

The original model, known as “market centric”, an industry standard, distributes the platform’s revenues between labels in proportion to listening. “He was extremely virtuous in allowing the music industry to rise again,” admits Olivier Nusse, Chairman of the Board of Universal in France.

But faced with the inflation in the number of titles present on Deezer, as with its competitors, which disperse the streams and the related income, this system designed fifteen years ago needed to be “reimagined”, for the two companies. UMG CEO Lucian Grainge has been campaigning in this direction since the beginning of the year. Fueled by the daily arrival of more than 100,000 new titles, most of which have never been heard, Deezer’s catalog has grown from 90 to 200 million items of content over the past two years.

“We felt it necessary to better promote the creations of artists who do this job professionally and offer a real offer to the public, in the midst of a heap of titles inspired by others or who, for some, who are not really music,” summarizes Olivier Nusse, Chairman of the Board of Universal in France.

“Above all, it’s a big step forward for artists, whether they’re independent or backed by a well-established producer,” he adds. It is also in the interest of users, whose “experience will not be polluted by non-musical content and who will contribute to more fairly remunerating the artists they love”, adds Stéphane Rougeot.

Reward engagement

In this new model, Deezer will award a “double bonus” (each stream will count double) to artists considered “professional” (those who exceed 1,000 monthly streams with at least 500 unique listeners).

An additional double bonus will also reward “songs that generate active fan engagement”: those that users have made the effort to search for or that they have placed in their personal playlists. Tracks included in playlists curated by Deezer editors will also benefit. The economic influence of algorithmic programming will thus be reduced.

Deezer also intends to replace non-musical content (sounds of rain, waves, washing machine, etc.), which represent around 2% of total streams on the platform but potentially several tens of millions of titles, with its own content. atmosphere from its service “

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