{"id":53276,"date":"2023-09-27T12:06:41","date_gmt":"2023-09-27T16:06:41","guid":{"rendered":"https:\/\/www.cyberlego.com\/web\/2023\/09\/27\/artist-centric-royalties-is-a-good-idea-but-it-wont-solve-everything-guest-column\/"},"modified":"2023-09-27T12:06:41","modified_gmt":"2023-09-27T16:06:41","slug":"artist-centric-royalties-is-a-good-idea-but-it-wont-solve-everything-guest-column","status":"publish","type":"post","link":"https:\/\/www.cyberlego.com\/web\/2023\/09\/27\/artist-centric-royalties-is-a-good-idea-but-it-wont-solve-everything-guest-column\/","title":{"rendered":"Artist-Centric Royalties Is a Good Idea \u2014 But It Won\u2019t Solve Everything (Guest\u00a0Column)"},"content":{"rendered":"

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\n\tEarlier this month, Deezer announced a new \u201cartist-centric\u201d royalty model<\/a> with Universal Music Group, under which the streaming service will distribute royalties under what amounts to a weighted system, rather than simply pro rata. The weighted system will attribute a doubled value to streams of \u201cprofessional\u201d artists, defined as those with 1,000 or more streams per month by 500 or more users, and would double that\u00a0value again for tracks that fans searched for as opposed to those served up by the platform.\u00a0<\/p>\n

\n\tAssigning more value to music that subscribers deliberately choose to hear is clearly a good idea. In some ways, algorithmically served songs might be more akin to non-interactive radio, which under U.S. law has always generated significantly lower royalty payments.\u00a0\u00a0<\/p>\n

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\t\t\t\t\tDeezer & Universal’s New ‘Artist-Centric’ Royalty Model Is Stirring Debate in the\u2026\t\t<\/p>\n<\/h3><\/div>\n

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\n\tGiving additional weight to music from more successful artists simply because they are successful is a less obvious move. Some have said that this new system sounds like a cynical reverse-Robin-Hood move that essentially takes money from the long tail of unsuccessful artists and hands it to the likes of Taylor Swift and Jay-Z simply because big artists are powerful enough to demand it. In fact, however, the proposed cutoff for defining \u201cprofessional\u201d artist status is pretty low \u2013 1,000 streams per month from at least 500 monthly users. Long tail \u201cnoise\u201d would be ineligible for the bonus, though, while even mildly successful developing artists would be treated the same as superstars.<\/p>\n

\n\tWhat will all of this mean in practice?\u00a0\u00a0<\/p>\n

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\"Thomas<\/figure>\n<\/div>\n

\n\tDeezer says in its press release that \u201c97% of all uploaders on the Deezer platform generated only 2% of the total streams. Whereas only 2% of all uploaders\u2014those artists attracting a consistent fanbase\u2014had more than 1,000 monthly unique listeners.\u201d It\u2019s not clear what percentage of uploaders constitute UMG\u2019s group of professional\u201dartists with more than 1,000 streams from at least 500 monthly users, or what share of total streams they command. But if 2% account for more than 1,000 monthly streams and 3% make up 98% of all streams, then under any reasonable assumption those having at least 1,000 streams from at least 500 monthly users must make up at least 99% of the streams.<\/p>\n

\n\tIf 99% of streams were weighted three-fold under this\u00a0artist centric policy \u2013 all would get doubled, but presumably many tracks would still be served up algorithmically \u2013 then, mathematically, that would increase their share to 99.66% (3\u00d799 divided by (3\u00d799+1)). So, the bottom, \u201cnoise\u201d, uploaders would see their share of streams and revenues diminished by 0.66% from 1% to 0.34%.\u00a0<\/p>\n

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\t\t\t\t\t\t\"Jeronimo<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

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\t\t\t\t\tDeezer CEO Explains How New UMG-Backed Streaming Royalties Model\u00a0Works\t\t<\/p>\n<\/h3><\/div>\n

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\n\tAnd what does it mean in real money?<\/p>\n

\n\tApplying this calculated reduction to IFPI\u2019s published wholesale audio streaming market number of $12.7 billion for 2022 would imply a squeeze on the \u201cnoise producers\u201d of $84m (assuming that all labels would eventually follow the UMG model). That\u2019s hardly a large number, but as UMG EVP Digital Strategy\u00a0Michael Nash says, \u201cwe\u2019re fixing the roof while the sun still shines\u201d \u2013 the industry leaders want to quash the value of the long tail while it\u2019s still relatively small. Assume that the streaming market grows at 10% a year to over $20 billion within the next 5 years, then assume that, left to the status quo, the revenue take of long tail noise would grow to 5%. If that\u2019s true, UMG\u2019s artist-centric system would cut the noise producer share from 5% to 1.70%, a squeeze of 3.3%, and the professional artist share would go from 95% to 95\u00d73 divided over 95\u00d73+5, or 98.3%. That would amount to a redistribution of $660 million to professional artists, an amount of money that would certainly\u00a0register.<\/p>\n

\n\tThat means artist-centric royalties do make sense, although they feel like more of a tweak to the existing system than a fundamental change.\u00a0\u00a0<\/p>\n

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\t\t\t\t\tUMG & Deezer\u2019s New Streaming Model Demotes Passive Listening \u2014 But Is That the\u2026\t\t<\/p>\n<\/h3><\/div>\n

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\n\tAs has been often noted, the current pro-rata model essentially takes subscription money from users who spend less time on a platform (lower intensity users) and passes it to the artists favored by those who spend more time there (high intensity users, or super fans). This redistribution of subscriber revenue does not reflect the proportional tastes of all fans in the market, so it disadvantages deep catalog artists and creators in genres favored by less active users, who tend to be older, such as classic rock, jazz and classical music. Besides being perceived as unfair it also reduces the funds that support a more diverse music landscape and contributes to more streamlined and monolithic business driven by megastars and TikTok. The artist-centric royalty system doesn\u2019t even address this.<\/p>\n

\n\tIt also doesn\u2019t do anything about the fact that heavy users still pay the same low monthly price for access to essentially\u00a0all the\u00a0music ever recorded as those who stream far less. Combining a higher monthly price for heavy users with a fan-centric royalty model\u00a0could represent the\u00a0leap forward that the industry needs, increasing average revenue per user (ARPU) from heavy users, who would be the least price-sensitive, while distributing the resulting royalties to better reflect the music preferences of everyone who pays for a service. Such a change would grow the overall business and at the same time fund the creative development of a more diverse music landscape.<\/p>\n

\n\tThomas Hesse is the former president of global digital business & US distribution at Sony Music Entertainment, and the president and chief digital officer of Bertelsmann. He currently builds and supports the\u00a0next generation of media companies.<\/em><\/p>\n<\/div>\n<\/div>\n

Aller \u00e0 la source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Earlier this month, Deezer announced a new \u201cartist-centric\u201d royalty model with Universal Music Group, under which the streaming service will distribute royalties under what amounts to a weighted system, rather than simply pro rata. The weighted system will attribute a doubled value to streams of \u201cprofessional\u201d artists, defined as those with 1,000 or more streams […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-53276","post","type-post","status-publish","format-standard","hentry","category-musique","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"_links":{"self":[{"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/posts\/53276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/comments?post=53276"}],"version-history":[{"count":0,"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/posts\/53276\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/media?parent=53276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/categories?post=53276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cyberlego.com\/web\/wp-json\/wp\/v2\/tags?post=53276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}