UMG, DEEZER DOUBLE DOWN ON ARTIST-CENTRIC MODEL

Universal Music Group and Deezer will roll out a streaming model designed to better reward artists. The experiment to cut out the “noise” will be launched in France in the fourth quarter. The move reflects UMG topper Sir Lucian Grainge's frequently expressed objective to retool streaming economics in the face of multiple challenges.

The two companies have used their deep data analysis to develop an economic model that better reflects the true value of artist-fan relationships.

Deezer will attribute a "double boost" to what it defines as “professional artists”—who have a minimum of 1,000 streams per month by a minimum of 500 unique listeners—to more fairly reward them for the quality and engagement they bring to the platforms and fans. It will assign this double boost to songs fans actively engage with, reducing the economic influence of algorithmic programming.

“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 1,000 fans or 100,000 or 100m,” goes a quote from Michael Nash, UMG EVP and chief digital officer. “With this multifaceted approach, music by artists that attracts and engages fans will receive weighting that better recognizes its value, and the fraud and gaming, which serve only to deprive artists their due compensation, will be aggressively addressed.”

Deezer intends to apply a stricter provider policy to ensure quality and a better user experience that includes steps to limit non-artist noise content. It will replace non-artist noise with its own content, which won’t be included in the royalty pool, and will continue to update its proprietary fraud-detection system, removing incentives for bad actors and protecting streaming royalties.

“This is the most ambitious change to the economic model since the creation of music streaming, a change that will support the creation of high-quality content in the years to come,” reads a statement from Deezer CEO Jeronimo Folgueira (pictured, as is Sir Grainge), who continues: “At Deezer we always put music first, providing a high-quality experience for fans and championing fairness in the industry. We are now embracing a necessary change, to better reflect the value of each piece of content and eliminate all wrong incentives to protect and support artists. There is no other industry where all content is valued the same, 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.”

Deezer’s deep dive into data revealed that, among other illuminating information, the artists listened to by new subscribers in their first month may drive as much as 25% to 30% of user’s streams over the first two years of their activity, and less than 3% of all uploaders—artists attracting a consistent fan base—had more than 1,000 monthly unique listeners, while 97% of all uploaders generated only 2% of the total streams. Deezer’s algorithm identified approximately 7% of streams as fraudulent in 2022. 2% of streams on the platform were tagged as “noise.”