Two weeks ago, MBW frankly suggested that, in order to tackle streaming fraud more effectively, the music industry’s leading platforms would need to switch to a ‘user-centric’ as opposed to a ‘service centric’ licensing model.
The current ‘service centric’ model used by leading streaming services sees artists paid out of one big pot. All of the distributable revenues generated by the likes of Spotify each month are divided amongst all artists based on the popularity of their individual tracks.
Transitioning to a ‘user-centric’ payment model would mean that if you pay a $9.99 subscription fee and listen to one specific artist, the distributable portion of that fee for recorded music rights (around $5.20 per month) would be handed to that artist, and only that artist, and/or their record label.
This week, one of the most influential independent label owners in the world has come out strongly in favor of the industry making this change.
Speaking to Paris-based daily financial newspaper Les Échos, Because Music boss Emmanuel De Buretel has argued that a user-based income distribution model “would reduce the share of ‘fake streams'” and “ensure a better flow of income between artists and titles”.
Said De Buretel (translated): “[The service-centric model] may cause a drying up of [streaming] income for many artists outside urban and electro music, and the eviction of musical genres such as certain segments of French music, classical, world music or jazz.”
He added: “The so-called ‘user centric’ model, based on a user-based income distribution, would be more virtuous. It would reduce the share of ‘fake streams’, ensure a better flow of income between artists and titles, or promote the diversity of musical genres. In short, a more equitable model. Professionals are [increasingly] wanting to switch to this model. We hope that a majority consensus will emerge in this direction.”
“The so-called ‘user centric’ model, based on a user-based income distribution, would be more virtuous. It would reduce the share of ‘fake streams’, ensure a better flow of income between artists and titles, or promote the diversity of musical genres.”
Emmanuel De Buretel
De Buretel is not alone in his call for change.
BMG CEO Hartwig Masuch told MBW’s sister publication Music Business UK in Q4 last year that “the user-centric licensing debate should be a next very clear battlefield in the evolution of streaming”.
Added Masuch: “For me, it is simply a question of fairness.
“Some services may like to say it won’t make too much difference, but that does not matter as much as being able to tell artists, ‘This system is fair, and this is how it works.’
“The user-centric licensing debate should be a next very clear battlefield in the evolution of streaming.”
“The user-centric licensing debate should be a next very clear battlefield in the evolution of streaming.”
Hartwig Masuch, BMG
Spotify rival Deezer has been looking closely at a shift to user-centric licensing for more than a year, while high-level whispers suggest that Amazon is now also investigating its potential impact on services like Amazon Music Unlimited.
MBW also hears that sympathies towards a user-centric model are softening at at least one of the major record companies, as these record labels begin to find favor in a system which would largely curb monetary ‘leakage’ to streaming fraudsters.
Emmanuel De Buretel founded Because Music in Paris in 2006 after spending nearly two decades at Virgin in France and in the UK.
Because has signed and developed stars from around the world, such as Christine & The Queens, Django Django, Charlotte Gainsbourg, Justice, Major Lazer, and Metronomy.
In 2017 Because inked a wide-ranging deal with Universal’s Caroline International to expand into the US.
“This [‘service-centric’] rule is increasingly criticized because it concentrates the income towards the top of the pyramid… due to the listening loop of a few dozen titles from a small number of artists.”
Emmanuel De Buretel
Elsewhere in the interview with Les Échos, De Buretel makes interesting points on indie labels, and calls for France’s neighboring rights system to be overhauled.
He explains that France currently has four neighboring rights collective management societies – including SCPP for the major labels and SPPF for the indie labels, which De Buretel chairs, in addition to a body for featured performers (Adami) and non-featured musicians (Spedidam).
“If we were grouped together, we would have economies of scale, we could allocate more support to our associates and lower our management rate,” says De Buretel, noting that the SPPF’s commission rate is lower than that of the SCPP.
Defending the worth of record companies in 2019, De Buretel adds: “Few artists apart from rap (Jul, PNL) explode without a record company. We are catalysts of success, very complementary to the artist today.
“We combine the experience of audio and audiovisual production with the marketing power in France and abroad, the management of the artist’s data and the flow of content that we create to build [an act’s] career.”Music Business Worldwide
