Deezer’s ‘artist-centric’ model now has a new ‘user-centric’ element which, despite not really being ‘user-centric’, is quite a clever idea.

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We’re heading towards Halloween, aka the last day of October, aka the last day of the month in which Deezer‘s much-debated new ‘artist-centric’ royalty model is due to launch in France.

Said launch should impact payouts to artists signed to recorded music companies (including Universal Music Group and indie label Wagram) who’ve signed up for ‘artist-centric’ on Deezer’s platform.

The three core pillars of Deezer’s ‘artist-centric’ model, as announced with Universal last month?

  1. Artists who attract over 1,000 listens a month (from over 500 unique listeners) on Deezer getting a “double boost” in their streams on the service;
  2. This ‘double boost’ then doubling again if a play of said artist’s music has been actively searched for by listeners vs. being algorithmically served to them;
  3. Deezer’s plan to “replace non-artist noise content” on its platform with its own Deezer-made “content in the functional music space”. Deezer will then completely de-monetize all “noise” content.

Except now there’s a new fourth entry on Deezer’s ‘artist-centric’ menu of royalty model changes – and it takes a bit of explaining.

Last week, Deezer announced that it had inked an agreement with France-headquartered collection society, Sacem, to “explore [the] ‘artist-centric’ model for publishing rights”.

(Deezer’s ‘artist-centric’ deals up to now, including the UMG agreement, only affect royalty payouts for recorded music.)

Yet there was something particularly curious within the Deezer x Sacem press release, which you can read here.

Towards the bottom, under its ‘notes to editors’, Deezer repeated the three pillars of ‘artist-centric’ mentioned above, while reiterating its more vague commitment to tackling streaming fraud on its platform.

Deezer also reiterated, as it’s said before, that it will apply a “stricter provider policy” to those uploading “non-artist noise”  to its platform in future– i.e. it will actively block/reject the kind of stuff that Sir Lucian Grainge would no doubt call “garbage”.

“In addition to the mentioned boosts, there is a user-centric element to the new model, with a monetization cap of a [thousands] streams per individual user per month.”

Deezer PR, issued last week

But there was also something else in Deezer’s ‘notes to editors’ in that Sacem PR – something we definitely haven’t seen before.

In the release, Deezer mentioned an entirely new cornerstone of its ‘artist-centric’ model, which slipped into the list of the model’s main attributes.

Copying verbatim from the Deezer press release, this part reads:

  • User-centric capped approach – In addition to the mentioned boosts, there is a user-centric element to the new model, with a monetization cap of 1000 streams per individual user per month. This means that every single user’s contribution to the royalty pool is counted as 1000 streams, no matter what the actual amount is. This way available royalties are shared more fairly between the artists the user is listening to each month and fraudulent behavior is discouraged.

Why Deezer’s ‘user-centric capped approach’ might be confusing

If you’re anything like Team MBW when we read this last week, you might be thinking: whaaaaaaa?

That’s because ‘artist-centric’ – as advocated for by Universal Music Group for some time – is very much not ‘user-centric’.

‘User-centric’, as deployed on SoundCloud via its ‘Fan-Powered Royalties’ model, is anchored in one simple principle: the royalty-bearing portion of an individual subscriber’s monthly payment (for example, $10.99 per month) is divided and paid out, exclusively, to the artists/rightsholders whose music that individual subscriber played in the period.

Very much unlike ‘user-centric’, the ‘pro-rata’ model sees all royalty-bearing payouts from a given service sitting in a central pool (or ‘one big pot’); this pool of money is then divided and paid out to each artist/rightsholder based on their market share of total plays across a service, by all users, in a given month.

‘Pro-rata’ as explained here, is the model upon which Deezer’s x UMG’s ‘artist-centric’ is understood to have been built.

So how will Deezer’s “user-centric capped approach” – now a cited central part of its ‘artist-centric’ model – actually work?

And what does it have to do with the real ‘user-centric’ model?

Understanding Deezer’s new addition to its model

MBW has made some calls to those in the know about Deezer’s “user-centric capped approach”, and we’ve discovered one very important strand of information.

If you assumed from Deezer’s wording that when an individual subscriber hits 1,000 streams played in a month, their monetization (i.e generated payments to artists) immediately stops, you assumed wrong.

What actually happens: Let’s say an individual subscriber to Deezer plays 2,000 streams in a month, which is a clear 1,000 streams above Deezer’s stated ‘monetization cap’.

At the end of that month, the total volume of streams that this individual’s plays get allocated within Deezer’s ‘pro-rata’ central royalty pool remains capped at 1,000 streams.

Therefore, the 2,000 streams our hypothetical individual played across the month on Deezer would each be counted at 50% weighting – i.e. 0.5 streams apiece.

If the individual had played 5,000 streams in the month, they would have counted – in terms of the pro-rata market share/payout calculation – as 0.2 streams apiece. etc. etc.

However many streams an individual user plays, those streams cannot claim more than 1,000 streams of market share within Deezer’s ‘one big pot’ come the end of the month.

Remember: via the ‘one big pot’ system, music rightsholders get paid for their market share of total streams across all users of a service. So if individual subscribers’ calculated streams in this model are capped… it deliberately restricts what any one rightsholder can earn from the activity of any one streamer.

As Deezer says: “This way available royalties are shared more fairly between the artists the user is listening to each month and fraudulent behavior is discouraged.”

You can see what the company means: If a streaming fraudster is running a streaming farm across various accounts on Deezer, as soon as any of those accounts hits the monetization limit of 1,000 streams in a month, every play above this point claims no more money from the central royalty pool.

But is that actually ‘user-centric’?

I mean, if you want this writer’s view, no, it’s not. Not really.

In reality, it’s a capped ‘pro-rata’ system, by which each individual’s streaming behavior can only bear a limited impact on Deezer’s ‘one big pot’/pro-rata-based royalty payouts.

It certainly requires monitoring of individual users’ activities on Deezer, just as a true ‘user-centric’ system of royalty payments would.

But it has little to do with a real ‘user-centric’ system, whereby the (royalty-bearing portion of) money paid by an individual subscriber to a streaming service like Deezer each month is then divided only between the artists/rightsholders they have played.

This, to be extra clear, is definitely not that.

What it is, however, is a clever way to reduce the power of streaming fraudsters everywhere, while retaining the ‘pro-rata’ roots of Deezer x UMG’s ‘artist-centric’ model.

Only one question hangs over Deezer’s 1,000-stream monetization cap, in this writer’s eyes: Is 1,000 streams too low a threshold?

A thousand streams in a month – that’s 1,000 plays, to be clear, not 1,000 tracks – equates, approximately, to just 33 streams per day (every day) in an average month.

Heavier users of music, even on a smaller service such as Deezer (relative to Spotify etc.) will surely play many more streams than this, legitimately, during the time-period in question.

Then again, maybe this is a healthy price to pay in order to meaningfully squeeze the influence of deliberate/professional/industrial/criminal streaming cheats?

JKBX (pronounced "Jukebox") unlocks shared value from things people love by offering consumers access to music as an asset class — it calls them Royalty Shares. In short: JKBX makes it possible for you to invest in music the same way you invest in stocks and other securities.Music Business Worldwide

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