WMG signs on to Deezer’s UMG-backed artist-centric royalty payments

In the latest sign that artist-centric royalties are set to reshape how artists get paid for streaming, WMG has signed on to the new payment scheme that Deezer co-created with UMG.

For now, the deal is only for Deezer’s home market of France but seems likely to expand.

“We are delighted to partner with Deezer on this “artist-centric” model, which rewards music that generates active engagement and demonetizes non-musical content,” Alain Veille, president of Warner Music France, told Les Echos. “Our new agreement will benefit creative talent at all stages of their careers and support our ability to invest in the next generation.” (translated)

While few argue that white noise and fraudulent tracks should receive royalties, some calculations show the new model will devalue or even demonetize as many as two-thirds of the legitimate music on most streamers which the major labels counter is music that gets little to no play already.

• Deezer will attribute a double boost to what they define as “professional artists” – those who have a minimum of 1,000 streams per month by a minimum of 500 unique listeners – in order to “reward them for the quality and engagement they bring to the platforms and fans.”
• A double boost will also be paid for songs that fans actively engage with, reducing the economic influence of algorithmic programming. In other words, playing a track from your library will pay the artist more than just hearing it in an algorithmically created playlist.
• Demonetizing non-artist noise audio – Deezer says that 2% of its streams are generated by white noise and that it will replace “non-artist noise” with its own content which won’t be included in the royalty pool. This goes much further than yesterday’s Spotify announcement that it was downgrading ad revenue opportunities for white noise streams.
• Tackling fraud – Deezer has also committed to upgrading its proprietary fraud detection system to remove incentives for bad actors and protect streaming royalties for artists.
• The partnership also enables data-based adjustments to optimize model performance and establish the foundation for the introduction of future elements such as ARPU (adjusted revenue per user) enhancements, including super-fan monetization.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.