Deezer and Universal’s New Artist-Centric Streaming Model: What Impact Will It Have?

In a move aimed at generating bigger royalties for artists, Universal Music Group and Deezer have announced their joint venture to launch an artist-centric music streaming model. With this new model, artists will be paid more when users actively choose to listen to their music, rather than relying on auto-play. Additionally, songs that appear in algorithmic playlists will generate less revenue compared to those handpicked by users. While this collaboration will initially be launched in France, its potential impact on the music industry is significant, especially if major streaming services like Spotify and Apple Music decide to adopt similar models.

The primary objective of this collaboration is to better reward artists and the music that fans value the most. Universal and Deezer argue that the current music streaming model has become oversaturated and needs to be reimagined to encourage more meaningful engagement between listeners and artists. To achieve this, non-artist noise content, such as ambient background music, will be replaced by Deezer’s own content, ensuring that it does not receive any royalties. Deezer CEO, Jeronimo Folgueira, considers this move as the most ambitious change to the economic model since the inception of music streaming. He believes it will support the creation of high-quality content in the future while championing fairness in the industry and combating fraud.

Folgueira also emphasizes the importance of differentiating the value of content within the music industry. Unlike other industries where content is valued differently, he argues that the sound of rain or a washing machine is not as valuable as a song streamed in high fidelity from one’s favorite artist. The artist-centric model aims to eliminate dynamics that risk drowning music in a sea of noise and ensure fair support and rewards for artists at all stages of their careers, regardless of their fan base size.

This joint venture comes at a time when the government has been investigating music streaming and the royalties artists receive. In 2021, an “imbalance” in royalties was identified, leading to the formation of a working group dedicated to examining artist compensation. Recent efforts by the music industry to improve metadata for tracking songs on streaming platforms also reflect the criticism from artists regarding unfair distribution of royalties. Some artists have advocated for a user-centric payment system, where a person’s subscription fee is divided among the artists they listen to, offering a fairer distribution model.

The introduction of an artist-centric streaming model by Deezer and Universal has the potential to shape the landscape of the music industry. If successful, it may lead to other streaming services reevaluating and adjusting their own models to prioritize artist compensation and meaningful listener engagement. As artists continue to demand fair royalties and greater transparency, this collaboration represents a step towards addressing these concerns and reimagining the streaming ecosystem.

While the implementation of an artist-centric model brings exciting prospects, it also raises several considerations. Firstly, the impact on streaming platforms like Spotify and Apple Music remains uncertain. If these industry giants choose to adopt similar models, it could lead to a significant transformation in the way artists are compensated and how listeners engage with their music. Secondly, the effectiveness of replacing non-artist noise content with Deezer’s own content needs to be evaluated. It is essential to ensure that this replacement does not hinder user experience or discourage potential subscribers. Lastly, the response from artists, especially those with smaller fan bases, will determine the success and longevity of this new model. It is crucial for all artists to feel fairly compensated and supported regardless of their level of popularity.

In conclusion, the introduction of an artist-centric streaming model by Deezer and Universal Music Group marks a significant development in the music industry. By prioritizing artist royalties and meaningful listener engagement, this collaboration aims to transform the existing music streaming ecosystem. However, it remains to be seen how other major streaming services will respond and whether this model will achieve its objectives of fairness and improved support for artists. As the industry continues to evolve, the artist-centric model could be a crucial step forward in ensuring a sustainable and equitable future for musicians.