In January, Universal Music Group announced an alliance with music streaming service Tidal that will see the two companies work together to explore what they call “an innovative new economic model for music streaming that might better reward the value provided by artists”.
The announcement came two weeks after UMG’s Chairman and CEO Sir Lucian Grainge, in a memo sent to UMG staff, referenced the company’s preference for a switch to an “artist-centric” model to transform the way that artists and rightsholders are paid by streaming services.
Earlier this month, during the company’s earnings call, Sir Lucian Grainge said that UMG was also working with France-born music service Deezer on these efforts.
On Wednesday (March 15), Universal confirmed an initiative between the two companies to “investigate potential new economic models for music streaming that more fully recognize the value artists create”.
According to a press release, through this collaboration, “UMG and Deezer aim to develop new methods that holistically reward recording artists and songwriters for the value they create and to reimagine and update the engagement model for Deezer’s users and the artists they love”.
The statement notes that Deezer was one of the first platforms to commit “to exploring alternative payment models to help assure artists are compensated fairly”.
Deezer launched a campaign to publicly champion a user-centric payment system (UCPS) back in September 2019.
Elsewhere in the statement issued by UMG and Deezer on Wednesday, the companies say that the new initiative “will seek to better align the interests of artists, fans and streaming services and explore ways in which artists at every point in their careers and from every genre and geography can more fully benefit commercially from streaming”.
Adds the statement: “With a foundation in deep data analysis, the partnership will look at the benefits and evaluate the viability of different economic models aimed at driving subscriber growth, forging stronger bonds with music fans on the platform and developing commercial opportunities that benefit artists and the broader music community.”
Deezer also says that it is “continuously developing new ways of connecting artists with fans” and some of the projects and features it is working on include super fan rewards, in-app livestreaming and VOD concerts, alongside lyric translations, music quiz functionality and much more.
Through this initiative with UMG, Deezer says it will also “gain insights that will inform future experiential features and monetization options”.
“Music is extremely undervalued today and as part of the artist-centric discussion we are keen to find additional ways of increasing monetization, to the benefit of real artists, the labels and platforms like Deezer.”
Jeronimo Folgueira, Deezer
Jeronimo Folgueira, CEO, Deezer, said: “As a key player in the music industry, we work with all labels to find ways to make the ecosystem fairer and help artists monetize their music better.
“The current system has clear issues that need to be addressed, such as increasing amounts of non-music tracks uploaded on platforms, poor quality covers with misspelt artists’ names and songs to ‘steal’ streams, and people trying to trick the system with the length of tracks.
Added Folgueira: “This hurts true artists, makes it harder for new ones to emerge and also damages the fan experience. We believe in quality and fairness at Deezer and with this initiative together with UMG we will look into how we can improve the model to everyone’s benefit.
“Music is extremely undervalued today and as part of the artist-centric discussion we are keen to find additional ways of increasing monetization, to the benefit of real artists, the labels and platforms like Deezer.”
“We’re thrilled Jeronimo and his team are partnering with us to explore how we can evolve streaming for the benefit of the entire ecosystem of artists, labels, platforms and fans.”
Michael Nash, UMG’s EVP, Chief Digital Officer, added: “Deezer has long advocated for a re-evaluation of subscription’s economic model.
“We’re thrilled Jeronimo and his team are partnering with us to explore how we can evolve streaming for the benefit of the entire ecosystem of artists, labels, platforms and fans.
“Such collaboration is critical to the success of the Artist-Centric initiative. While there won’t be one uniform quick fix—subscriber acquisition and retention dynamics and metrics vary by platform—our partnership with Deezer will help accelerate this entire enterprise.”Music Business Worldwide
