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New policies are emerging to manage the vast amount of music uploaded to streaming platforms.

As one of the new policies designed for containment and the “proper” treatment of artists on streaming platforms, Deezer introduces a classification model based on the plays artists receive. Deezer and UMG (Universal Music Group) have agreed on the way earnings are perceived. In this plan outlined by the French application, “white noise” and other non-musical files will be excluded from royalties.

The online music platform will grant double compensation to those artists considered professionals, meaning those with a thousand plays per month and a minimum of 500 unique listeners, aiming to “protect them for the quality and connection they provide to the platform and fans.” Double compensation will also be paid for actively listened songs, regardless of algorithmic recommendations. This means that playing a song independently will be better paid for artists than the same song played based on the platform’s suggestions in a pre-set playlist. Deezer’s new calculations propose higher compensation for mid-level and massive artists, but this increase in earnings will come at the expense of emerging artists.

Believe, a French digital music company, has protested Deezer and UMG’s indifference towards emerging artists and the independent music community. Believe refers to this new strategy as a kind of “reverse Robin Hood” system.

“As a company working with artists and labels at all levels, we believe that all artists should be compensated fairly on streaming services, regardless of the stage of their careers. We strongly oppose this model, which focuses on taking compensation from emerging artists to allocate it to those who are already massive and established. It is our belief, based on data, that such a system will reduce diversity and discourage creativity,” the company expressed.

Some of the issues with the streaming market include:

  1. Listening to music has become a commodity.
  2. The volume and speed of published music are excessive.
  3. Most artists do not earn enough.
  4. Artists are building audiences instead of a loyal fan base.

UMG and Deezer’s new policy addresses some of these issues but neglects others, especially the last two.

Between 2000 and 2022, non-label artists saw a 60% growth in streaming royalties, while more popular ones saw a 35% increase. In 2022, non-label artists represented 8% of total earnings. This growth is due to the majority of musicians at the lower rungs in terms of plays, i.e., those with fewer than a thousand plays. The number of artists with this amount of plays is growing simultaneously with the perception of their corresponding earnings, making it difficult for most of them to break the 1000-stream barrier. This suggests that perhaps the most significant and dynamic portion of the music industry would be a constant source of income for large companies and their representatives. The idea that half of the royalties from an aspiring artist in their room are taken to pay, for example, Taylor Swift, sounds absurd and an offense to effort and creativity.

Image of Deezer. Source: Google

Image of Deezer. Source: Google

 

The idea of a thousand plays is not inherently a bad idea. It could be used in the opposite way intended to rebalance the streaming economy. These artists with a thousand plays easily represent 80% of the total set. The vast majority generates less than $100 per year. Overall, their total income represents approximately 1% of all streaming royalties, meaning the impact on big artists will be relatively small. It’s hard to imagine how musicians with fewer than 1000 monthly plays will get double compensation without that money being added as a bonus to royalties or taken from somewhere.

Many emerging artists have a solid fan community that ensures their latest releases are heard many times. For example, in the model of 500 monthly listeners, even if 300 listen to a new song from a new artist five times a month, it would not qualify for this double compensation. In contrast, an artist who gets a song in any playlist with a thousand listeners would qualify. An inconsistency that should be reviewed. Independent labels seek, encourage, and invest in new talent; it’s the most important role in the music business. A streaming royalty mechanism that takes from 80% of all artists to redistribute it to the other 20% is simply unjust. Companies invest in the stars of the future. Who wouldn’t want to invest in the future?

Written by Diego Armando.

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