Universal Music Group agrees to new terms with Deezer. The record label company just landed a new royalty model that will help boost popular artists as it just entered or rather agreed to new terms with Deezer that will award higher payouts to professional artists over other content.
Universal Music Group with Deezer
Universal Music Group (UMG) just announced a new streaming deal today with French music service Deezer that reportedly aims to direct more listener payouts toward professional artists. The changes in question will essentially count a single listen as two listens on more well-known and popular tracks, thus giving them more revenue than smaller ones. Platforms such as Apple Music and Spotify (and Deezer) at the moment generally divide payments based on total listens, regardless of what the track in question is or who made it.
In the new deal and partnership, “professional artists,” from big stars such as BTS and Billie Eilish to up-and-coming bands, will effectively get to see payout increases of 10 percent, the Financial Times reports. And in order to qualify for the increased payouts, artists will need a minimum of 1,000 streams per month by at least 500 separate users on the platform. The values as you should know can double again to the equivalent of four streams if it is that users actively search for specific artists and tracks to play.
What Deezer CEO Thinks about This New Development
Deezer CEO Jeronimo Folgueira revealed that the deal in question is the “most ambitious change” to the economies of music streaming ever since it initially started. “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,” Folgueira in a press release stated.
Deezer on its own end will reportedly demonetize tracks that are detected as non-artist ambient noise, and the company is also looking to replace them with a new in-house library of sounds. Deezer has stated that it will not collect any royalties on the upcoming noise tracks.
What This Deal Means For Streamers and Artists
UMG and Deezer’s “artist-centric” deal according to the press release, helps to protect streaming royalties for artists simply by essentially disincentivizing amateur tracks and unauthorized uploads. Deezer has stated that about 7 percent of streams in the previous year were detected as fraudulent by its systems, which reportedly identified fake accounts and payment fraud. The Deezer platform and company will launch the new model this very year in France in Q4 and will subsequently roll it out to other markets much later.
Deezer’s CEO Emails to News Platform the Verge Regarding the News
Folgueira in an email to The Verge, shares that the deal might just go beyond just UMG:
“We have several other labels signing up to the new model as we speak, and therefore we expect to have more content providers on board by the time we start. Our intention is to have achieved a full rollout with all providers and countries in 2024.”
The popularity of streaming music has not translated to deeper pockets at record companies entirely. Goldman Sachs Research data that was published in July finds that streaming music consumption has reportedly increased 2.5 times since the year 2017, but revenue per stream has however fallen 20 percent in the same timeframe.
Other Streaming Companies with Similar Deals and Partnerships
Deezer and UMG will eventually collaborate on adjusting the payout models over time, which could in question have a ripple effect on other streaming provider deals. SoundCloud is yet another music streaming service that is currently toying with payouts as well with its “fan-powered royalties” model, which reportedly has Warner Music Group on board. That very model in question divides each payment of subscribers among the artists that they actually listen to, rather than just combining all subscription revenue into a single pool to be shared by every artist on the platform.
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