More music on streaming service Deezer’s platform is shifting to an “artist-centric” royalty payment model.
Under a new deal announced on Thursday (March 21), Merlin, the digital music licensing organization for indie record labels, distributors and other rightsholders will be paid under Deezer’s new artist-centric model for music streamed in France.
In that move, Merlin will be joining Universal Music Group (UMG) and Warner Music Group (WMG) in shifting away from the traditional pro-rata payment model employed by most music streamers, to one that prioritizes artists with a “consistent an engaged fan base,” as the companies described it in a statement.
Merlin’s membership across 70 countries represents 15% of the global recorded music market, and includes indie music companies such as Armada Music, Because Music, CD Baby, Downtown Music, Cinq Music Group, EMPIRE, Ninja Tune, Sub Pop, and Symphonic, among hundreds of others.
Deezer’s model – one that many music execs have been advocating for recently, among them UMG Chairman and CEO Sir Lucian Grainge and WMG CEO Robert Kyncl – launched last September, under a new agreement between the streaming service and UMG.
Under that deal, “professional artists” – defined as those who have a minimum of 1,000 streams per month and a minimum of 500 unique listeners – receive a so-called “double boost” to royalty payments, which gives those tracks double weighting when calculating royalties.
A “double boost” is also applied to tracks from artists who have been actively searched for by Deezer users.
Warner Music Group signed up for Deezer’s new payment model last November.
“Merlin’s participation in this model ensures its independent members are fairly compensated for their artist’s music and works towards ensuring a healthy and sustainable music ecosystem for artists,” Deezer and Merlin said in a statement.
“I’m very happy to see that Merlin and its members are embracing Deezer’s artist centric model and joining us in redefining artist remuneration in the streaming era, to make sure artists are paid more fairly for their music,” Deezer CEO Jeronimo Folgueira said.
“From the start, our ambition has been that the new model should serve all artists with a consistent fan base, including the indie acts represented by the membership of Merlin.”
Folgueira – who is set to depart his role as Deezer’s chief executive at the end of March – has been advocating for changes to the streaming music business model, criticizing the uploading of “useless” tracks – often just noise or sound effects – that takes away royalty money from legitimate artists while providing nothing of value to listeners.
“There’s a lot of duplicated content, there’s a lot of content that is not even music… and at a certain point, you get way too much content that is useless for the users. And it starts creating a bad user experience,” Folgueira said on an earnings call last year.
The artist-centric model is part of Deezer’s strategy to address that problem, as is an effort to remove low-quality tracks from its platform. The company confirmed last week that it has removed 26 million tracks from its platform in the months since it rolled out the artist-centric model. That represents about 13% of the platform’s catalog.
“I’m very happy to see that Merlin and its members are embracing Deezer’s artist-centric model and joining us in redefining artist remuneration in the streaming era, to make sure artists are paid more fairly for their music.”
Jeronimo Folgueira, Deezer
For the time being at least, Deezer’s artist-centric model is being applied only in France.
“Merlin’s mission is to ensure that the voices of its independent members are heard and that they have access to the most innovative opportunities in the digital marketplace while ensuring their artists are fairly compensated,” Merlin CEO Jeremy Sirota said.
“We have worked with Deezer to ensure their new model works for the benefit of our members, representing a path forward in ensuring that high-quality music, and the artists who create it, are recognized and rewarded in the manner they deserve.”
Ryan McWhinnie, VP of Business and Legal Affairs, Merlin, added: “Renewing our partnership with Deezer highlights Merlin’s commitment to our mission and the importance of collaboration in shaping a future where independent music thrives.”
“We have worked with Deezer to ensure their new model works for the benefit of our members, representing a path forward in ensuring that high-quality music, and the artists who create it, are recognized and rewarded in the manner they deserve.”
Jeremy Sirota, Merlin
The artist-centric model is not without its detractors. Some in the industry have expressed concerns that a royalty payout model that demonetizes tracks with low stream counts and few engaged fans could make it more difficult for new artists to break through.
France-headquartered digital music company Believe is among those who – though praising Deezer for its efforts to remove low-quality tracks – fears what an artist-centric model could mean for new artists.
“As a company working with artists and labels at all levels, Believe considers that all artists shall be compensated equally by streaming services regardless of their stage of development,” the company said last September.
“We strongly oppose an unfair ‘reverse Robin Hood’ system that is centered around taking compensation from rising artists to allocate it to top and established artists. Further, it is our belief, based on data, that such a system would reduce diversity and discourage creativity.”Music Business Worldwide
