Music streamer Deezer is soliciting rights holders to test a major change in how streaming royalties are calculated. So-called "user-centric payments" would more fairly compensate low and mid-tier artists, according to its supporters.
While not a top tier player, Deezer's 14 million users would provide an adequate test of the concept.
But so far, only smaller independent music companies have signed on to Deezer's UCPS test, including Because Music, Wagram Music, Play Two, Idol, Tot ou tard, Outhere Music, #NP, Believe Distribution Services, Six et Sept, International Artist Organization of Music, FELIN, UPFI, MMF France and GAM.
Pros & Cons
Under the current system, per-stream payments are calculated as a share of each streaming service’s revenue prorated by the number of streams. "Sounds simple, but mixed with the near-payola of Spotify’s playlist culture and Pandora’s 'steering' deals, it’s really not," says music attorney Chris Castle. "Negotiating leverage allows big stakeholders to tweak the basic calculation with floors, advances (aka breakage), nonrecoupable payments and other twists and turns to avoid a pure revenue share."
Not so fast, says MIDiA analyst Mark Mulligan: "The big issue then, as now, was that it is a very complex concept to implement which may well only have modest impact on a macro level but may also have the unintended consequence of worsening income for smaller artists. Fans of smaller artists tend to be more engaged listeners who generate a larger number of streams spread across a larger number of artists. The net result could be lower average income for smaller indie artists, and higher income for mainstream pop acts who have listeners with lower average streams spread across a smaller number of artists."