After All The Talk, “Artist-Centric” Streaming Royalties To Become A Reality

For the last few years we’ve heard a lot about an alternative streaming royalty model called user-centric, where the artist gets paid according to the number of times that a user listens. The current standard pro-rata way of determining royalty payouts which uses market share. This was all talk until Deezer and Universal Music Group announced its upcoming “artist-centric” royalties, using the user-centric model but with a twist.

Deezer-UMG artist-centric royalties

The way streaming royalties are paid out today for most streaming services is that the subscription revenue is totaled up at the end of the month, and is divided by the number of streams that each artist has (this is a simplified version of what happens). Since the streams are coming from different tiers and territories with different rate, this also means that no two artists are paid the same for a stream, so the numbers that you see regarding the amount that each service pays per stream is just an average.

User-centric is said to be fairer in that if a user listens to a single artist 90% of the time during the month, that artist would get 90% of her $10.99 subscription.

Enter Artist-Centric

The Deezer-UMG model uses the same idea, but rewards artists that are more popular. Artists that Deezer defines as “professional artists” will get a “double boost” of royalties. A professional artist is defined as those who have a minimum of 1,000 streams per month by a minimum of 500 unique listeners. What “double boost” actually means has not been spelled out.

This might not seem fair to indie artists but the according to Deezer, “only 2% of all uploaders—those artists attracting a consistent fanbase—had more than 1,000 monthly unique listeners.” In other words, those artists with a real fanbase are being rewarded for it.

Not only that, songs that fans actively search for will also get a double boost as well.

The company also announced that it would be “Demonetizing non-artist noise audio – Deezer is planning to replace non-artist noise content with its own content in the functional music space, and this won’t be included in the royalty pool,” something that Spotify should consider doing as well.

Not-Everywhere Yet

Deezer is a French company so it’s only fitting that the artist-centric royalty model should be rolled out in France first during the last quarter of 2023. There’s no timetable as to when it will launch in other territories but Deezer states to expect it sometime during 2024.

As stated in one of my previous posts, user-centric royalties might have unintended consequences, but now we’re going to find out for sure.

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