In fall 2023, Deezer announced it was adopting an “artist-centric” royalty model with Universal Music Group (UMG) in an effort to better compensate acts with significant followings and the rightsholders who own their recordings. That move, intended to tackle fraud and reduce royalties flowing to what is essentially noise and “functional music” was intended to rebalance a streaming model that some major players believe needs reform. Other major labels followed, as did Spotify, which made different adjustments to its royalty model toward the same end.
On Wednesday (Jan. 15), Deezer and the French PRO SACEM announced a deal to compensate publishing rightsholders the same way. “We started a year and a half ago with UMG and then the other majors,” said Deezer CEO Alexis Lanternier. “And now we’re doing it on the publishing side.”
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SACEM’s interest in this idea goes back to an analysis of the potential effects of artist-centric royalty payouts that the PRO conducted last year. “The first thing I wanted was to remove noise from the revenue, especially at a time when dilution is an issue” said SACEM CEO Cécile Rap-Veber, “The second thing is that it helps prevent fraud.”
While Deezer will not remove any music from its platform as a result of this agreement, the service will either demonetize or essentially allocate less royalties to some tracks, by boosting the royalties earned by others. The change, which will take effect soon, could help labels and services better prepare for the age of AI, when music executives worry that online services will be flooded by unpopular, low-value music that cuts into their business with sheer scale. “With AI coming,” Rap-Veber says, “we’re afraid that human creation might be affected.”
Deezer’s specific plans are more ambitious than what it did on the recording side. Like other artist-centric models, artists get a royalty boost for hitting a measure of popularity — in this case, double royalties for songs that are actively searched out or those by artists with 1,000 streams a month from 500 different subscribers.
More interesting, the service will impose what it calls a “user centric cap” that will limit how much the listening choices of any individual subscriber can affect royalty payouts, which will also make fraud more difficult and less efficient. Also, Deezer will completely exclude from the royalty pool tracks that consist of noise and “functional sounds,” such as rain on a roof; instead, Deezer will recommend similar music that it owns, which will not count for payout purposes and thus not take royalties from other rightsholders. (Some of these tracks might not even be considered copyrighted works under EU law, at least on the publishing side. While recording the sound of rain on a roof might arguably involve creative choices, there is no composer in the sense of copyright law.) Deezer will also remove tracks that have not been streamed in a year.
