Music Business

UMG, Deezer ‘double boost’ launch upends streaming payments to artists

Universal Music Group (UMG) has launched its long-promised artist-centric payment model with EU-based music streaming service Deezer. But unlike some of UMG’s other royalty experiments, this reveal comes with details about how artist payments are likely to change.

UMG has demanded that payments for tracks without meaningful engagement, including white noise and other non-artist ‘noise-related’ content, be reduced or eliminated leaving more money for artists with active listeners.

But exactly how much engagement would trigger a shift in payments has been a real concern for developing artists, and today’s announcement provides some answers.

UMG and Deezer describe how the new artist-centric model will work:

  • Deezer will attribute a double boost to what they define as “professional artists” – those who have a minimum of 1,000 streams per month by a minimum of 500 unique listeners – in order to “reward them for the quality and engagement they bring to the platforms and fans.”
  • A double boost will also be paid for songs that fans actively engage with, reducing the economic influence of algorithmic programming. In other words, playing a track from your library will pay the artist more than just hearing it in an algorithmically created playlist.
  • Demonetizing non-artist noise audio – Deezer says that 2% of its streams are generated by white noise and that it will replace “non-artist noise” with its own content which won’t be included in the royalty pool. This goes much further than yesterday’s Spotify announcement that it was downgrading ad revenue opportunities for white noise streams.
  • Tackling fraud – Deezer has also committed to upgrading its proprietary fraud detection system to remove incentives for bad actors and protect streaming royalties for artists.
  • The partnership also enables data-based adjustments to optimize model performance and establish the foundation for the introduction of future elements such as ARPU (adjusted revenue per user) enhancements, including super-fan monetization.

“There is no other industry where all content is valued the same,” said Jeronimo Folgueira, CEO of Deezer, “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 favorite artist streamed in HiFi.”

“The goal of the artist-centric model is to mitigate dynamics that risk drowning music in a sea of noise and to ensure we are better supporting and rewarding artists at all stages of their careers whether they have 1000 fans or 100 thousand or 100 million,” said Michael Nash, UMG’s EVP and Chief Digital Officer.

UMG has long demanded changes in how artists are paid for streams and the two companies developed this new model as part of their previously announced collaboration. A similar UMG experiment is still underway with SoundCloud.

Deezer will launch the new payment model in France in Q4 of this year with additional markets to follow. 

Hypebot Analysis

We will only know the full impact of these changes when the first royalty statements go out next year. But smaller and developing artists and indie labels can likely breathe a sigh of relief that most will not be left out as UMG pushes its ‘artist-centric’ plan.

A threshold of “1,000 streams per month by a minimum of 500 unique listeners” to trigger “double boost” payments is a fairly low bar and human-curated playlist plays will still receive full credit. Those artists with very low engagement or whose plays are driven by algorithmic playlists will likely feel a pinch.

Other than a promise to boost detection efforts, missing from today’s announcement is any mention of the music industry’s next big challenge – music created using AI and where it will stand in this new payment hierarchy.

This is only the beginning, but overall it’s a promising one.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.

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