UMG, TIDAL PARTNER ON NEW MODEL

UMG has announced a partnership with JAY-Z's Tidal and is reportedly in talks with other DSPs to overhaul the current streaming model in an effort to direct more money to artists. The action is part of Uni topper Sir Lucian Grainge's well-publicized effort to improve the economic equation of streaming.

UMG and Tidal have apparently considered a “bonus pool” of money for artists who drive more value to platforms by generating an abundance of streams from new users. The companies are also looking at ways to measure fan engagement and reward loyal users with “extra perks."

Tidal's Jesse Doroguske declared, "This partnership will enable us to rethink how we can sustainably improve royalties distribution for the breadth of artists on our platform."

As Grainge expressed in a memo to his staff earlier this month, there are abiding concerns about the way artists get paid by streaming services and the dizzying rate at which content is being uploaded to those platforms.

"Today, some platforms are adding 100,000 tracks per day," Grainge wrote. "And with such a vast and unnavigable number of tracks flooding the platforms, consumers are increasingly being guided by algorithms to lower-quality functional content that in some cases can barely pass for ‘music.’”

The industry is simultaneously battling increasing manipulation of the system, including the use of bots to inflate listening figures and the uploading of 31-second clips that are just long enough to qualify as a “play.”

“You have a quantity-over-quality challenge right now,” Michael Nash, UMG's chief digital officer, told the Financial Times. “That’s making it harder for new artists to establish themselves, for new releases to come through.”

Universal wants to snuff out online bots and other non-human parties in the first phase of the overhaul. Beatdapp, a startup focused on identifying streaming fraud, estimates that about 10% of all streams on U.S. platforms are fraudulent. UMG is also discussing banning the 31-second clips.

Grainge, as he explained in his memo, hopes an improved model "supports all artists—DIY, indie and major. It is 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, enhances the value proposition of the platforms themselves, accelerating subscriber growth and better monetizing fandom.”