Universal’s New Streaming Deal Pins Hopes on Paying the Pros

(Photo Credit: Ronald Woan/Creative Commons)
(Photo Credit: Ronald Woan/Creative Commons)

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Who knew white noise could cause such a racket?

Universal Music trumpeted a new deal with French streaming platform Deezer on Wednesday that has the small indie streamer rejigging how it reimburses artists, paying them more. It’ll come up with the funds by paying out less on the tens of millions of white-noise tracks generated by amateurs and AI.

Swimming Upstream

Deezer isn’t quite a player in the streaming music industry. James Badley, a musicologist and research associate at Downstream (a music streaming research project funded by UCLA) told The Daily Upside that Deezer commands roughly 1.6% of the global subscriber market, compared to Spotify’s 32% and Apple Music’s 15%.

Badley said that for tiny Deezer, a new streamlining strategy was a matter of survival. For Universal, though, the new model lays out an entirely different blueprint; showing streaming services they can pivot to different reimbursements for different types of content:

  • “We have 90mn tracks and many of them are just noise, like literally noise,” Deezer CEO Jeronimo Folgueira told the Financial Times. “It is fundamentally wrong that 30 seconds of the recording of a washing machine gets paid the same as the latest single by Harry Styles.”
  • Deezer will double the proceeds that go to professional artists who get at least 1,000 streams per month from a minimum of 500 unique listeners and will double them again if a user has actively sought out a song. Deezer also plans to root out “non-artist noise content” and replace it with its own homemade ambient-noise content.

Badley told The Daily Upside that “double-boosting” could help “artists who have made themselves known outside the algorithmic system.” However, he acknowledges that lesser-known artists still don’t have an easy path to making a living. “The fastest-growing part of the streaming market is made up of artists with less than 1,000 streams,” Badley said. “Meaning, this new system switches the load on the revenue model, and now a bedroom producer sees their royalties halved compared to major pop stars.”

Money For Nothing: Spotify also is limiting ad privileges for white-noise podcasters, according to a recent Bloomberg report. A Bloomberg report from last year said the podcasters were earning as much as $18,000 per month through a now-nixed ad program. Badley said he believes allowing platforms to control AI-generated white-noise tracks is an important step toward preventing them from gaming streamer payouts. But he acknowledged that enforcement could be problematic. “I would be worried however about who (or what) is making decisions on what is and isn’t white noise,” he said. “That is a completely different conversation.” Such decisions shouldn’t be made quietly, in other words.