UMG Universal Music Group NV

   By Mauro Orru and Cecilia Butini 
 

Universal Music Group is partnering with France-based streaming company Deezer to roll out a new streaming model aimed at better rewarding established artists, a move the companies say is necessary to tackle a flood of uploads on the Deezer platform with no meaningful engagement from listeners.

The record label behind the Weeknd, Billie Eilish and Taylor Swift said Wednesday that the new model would launch in France in the fourth quarter ahead of its rollout in additional markets. Deezer will boost the value of streamed content by artists who have at least 1,000 streams per month by a minimum of 500 unique listeners, while demonetizing what it called non-artist noise content that makes up roughly 2% of streams on its platform.

"We are now embracing a necessary change, to better reflect the value of each piece of content and eliminate all wrong incentives, to protect and support artists," said Deezer Chief Executive Jeronimo Folgueira. Deezer's catalog grew from 90 million to more than 200 million pieces of content in the last two years.

Artists have long tussled with streaming platforms over payments for their music. In 2014, Taylor Swift's entire music catalog was temporarily yanked from the Spotify Technology streaming service after the pop star's record label asked the company to make her music available to its paying subscribers only, and not to the users of its free, ad-supported tier. Spotify declined the request.

One year later, Swift released an open letter to Apple in protest to the tech giant's decision not to pay artists royalties during a three-month trial periods that customers get for its Apple Music. Apple subsequently backed off its plan.

In 2022, music publishers and streaming services reached an agreement to raise the rates songwriters get paid when their music is played on Spotify and other digital platforms.

Universal said that while streaming has been the most significant technological advancement the music industry had seen in recent years, platforms have been inundated with a flurry of uploads with no meaningful engagement that can be detrimental to established artists.

Deezer's data showed that content clutter is impeding the discovery of artists by fans, noting that 97% of all uploaders on the Deezer platform generated only 2% of total streams, while just 2% of uploaders had more than 1,000 monthly unique listeners.

"The goal of the artist centric model is to mitigate dynamics that risk drowning music in a sea of noise and to ensure we are better supporting and rewarding artists at all stages of their careers whether they have 1000 fans or 100 thousand or 100 million," said Michael Nash, Universal's executive vice president and chief digital officer.

The partnership will clearly tip the balance in favor of larger, established artists, Citi analysts wrote in a note to clients. "In our view, this should be very helpful in terms of UMG's share of royalty payments from Deezer, however Deezer is a small player in the global context, so this is unlikely to materially move the needle," they said.

Write to Mauro Orru at mauro.orru@wsj.com and Cecilia Butini at cecilia.butini@wsj.com

(END) Dow Jones Newswires

September 06, 2023 07:58 ET (11:58 GMT)

Grafico Azioni Universal Music Group NV (EU:UMG)
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Grafico Azioni Universal Music Group NV (EU:UMG)
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