Deezer’s plans for an ‘artist-centric’ streaming model with Universal Music Group have attracted spirited debate within the music industry. Is this a viable streaming payout model, or simply a cooked-up scheme to help UMG and its major label ilk?
In the latest weight-in, American Association of Independent Music (A2IM) President & CEO Richard James Burgess has offered up his thoughts on the new model. Burgess says his silence up until this point has been based on a need to understand the underlying thinking and calculations behind the Deezer+UMG ‘artist-centric’ approach.
“I am sure we all agree that the streaming ecosystem needs to be modernized and improved,” Burgess shared. “In the excitement about the growth of streaming, an issue that has not been addressed is that the global recorded music market is still significantly below its 1999 peak by adjusted dollars. It’s unlikely that peak will ever be exceeded with the current levels of subscription rates.”
“The Deezer model rewards artists who are actively searched for by users and those who maintain a level of 1,000 streams per months from at least 500 unique accounts. This is an effort to reduce the gaming of the system, while boosting payments to professional artists. Noise content that contains no music will be removed from the service and replaced with Deezer-owned content that will not be part of the royalty pool.”
“Tracks designed to game the system will also be removed. Deezer expects these changes to increase artist royalties. Streaming fraud reduces the pool monies available to genuine artists and A2IM has been actively working for many years to address the issue of stream manipulation in its various and ever-changing forms.”
“Critics are concerned that Deezer’s proposal could harm independent artists and limit opportunities for new artists in the streaming industry. Deezer has told me that they are equally concerned about this and that they have plans to ensure that emerging artists are not disadvantaged.”
But what are those plans? Right now, it’s unclear and not everyone is convinced that this new model will be the answer to the industry’s streaming woes.
That includes — perhaps most notably — Believe. “As a company working with artists and labels at all levels, Believe considers that all artists shall be compensated equally by streaming services regardless of their stage of development,” Believe said in a statement following the Deezer/UMG announcement. “We strongly oppose an unfair ‘reverse Robin Hood’ system that is centered around taking compensation from rising artists to allocate it to top and established artists. Further, it is our belief, based on data, that such a system would reduce diversity and discourage creativity.”
Stay tuned for more back-and-forth — with Deezer apparently taking the feedback constructively.