Universal Music Group isn’t the only major music company to endorse Deezer‘s new ‘artist-centric’ royalties model.
Today (November 13) it’s been confirmed that Warner Music Group – the world’s third-largest music rights company – has also partnered with Deezer on the new payout system for recorded music royalties.
That partnership, initially at least, centers on one territory: Deezer’s home market of France.
Alain Veille, President of Warner Music France, said in an interview (translated) with Les Echos today: “As we’ve consistently said, we’re committed to working with the streaming platforms to evolve business models to better reflect the value and fan engagement driven by artists, songwriters, and their art.
“So we are delighted to partner with Deezer on this artist-centric model which rewards engaging music and demonetizes non-artist noise. Our new deal will benefit creative talent at all stages of their careers and support our ability to invest in the next generation.”
MBW understands that Warner Music Group, like Universal, has been receiving royalties from Deezer under an ‘artist-centric’ system since October 1 in France.
Deezer’s ‘artist-centric’ model was announced by the DSP in conjunction with Universal Music Group in September.
The three core pillars of Deezer’s ‘artist-centric’ model are:
- Artists who attract over 1,000 listens a month (from over 500 unique listeners) on Deezer getting a “double boost” in their streams on the service;
- This ‘double boost’ then doubling again if a play of said artist’s music has been actively searched for by listeners vs. being algorithmically served to them;
- Deezer’s plan to “replace non-artist noise content” on its platform with its own Deezer-made “content in the functional music space”. Deezer will then completely de-monetize all “noise” content.
In that UMG/Deezer announcement in September, Michael Nash – EVP of UMG and the company’s Chief Digital Officer – clarified that the weighting formula behind Deezer’s ‘artist-centric’ model may evolve over time.
Said Nash: “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.”
Since becoming Warner Music Group’s CEO in January, Robert Kyncl has been pushing for an approach from DSPs that recognizes the relative value that different artists and music add to their service.
During a WMG earnings call in May, Kyncl called for a change in DSP royalty models, noting: “It can’t be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof….Now that the industry is healthy and has grown incredibly well, it’s time to re-evaluate how we’re licensing to DSPs, and to [change the model] together with them…
“Music cannot [continue to] be the only industry that doesn’t assign [additional] value to high-value artists and songwriters, and doesn’t drive ARPU growth the way every other industry does.”
Universal Music Group’s CEO & Chairman, Sir Lucian Grainge, first coined the ‘artist-centric’ descriptor in January, when he wrote a letter to his global employees calling for a change in the music industry’s typical streaming royalty model.
Wrote Grainge: “We need a model that supports all artists — DIY, indie and major. An innovative, ‘artist-centric’ model that values all subscribers and rewards the music they love. A model that will be a win for artists, fans, and labels alike, and, at the same time, also enhances the value proposition of the platforms themselves, accelerating subscriber growth, and better monetizing fandom.”
Following the announcement from UMG/Deezer of the latter’s new ‘artist-centric’ royalties model in September, MBW reported that Spotify is also due to make substantial changes to its royalty model in Q1 2024.
Potentially influenced by elements of Deezer and Universal’s ‘artist-centric’ announcement, Spotify‘s new model will see tracks only start to earn recorded music royalties after they surpass 1,000 streams on the service annually.Music Business Worldwide