By | Published on Wednesday 11 September 2019

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Deezer has today formally backed the user-centric approach to distributing digital royalties. It has launched a consumer-facing website that explains what user-centric is all about and why it thinks it would be a fairer way of sharing out streaming income.

The global streaming firm has been quietly lobbying for a shift to user-centric for some time, but the new website sees it go much more public on the issue. At the same time, it is seeking to persuade labels and distributors in its home market of France to switch to user-centric next year.

Alexander Holland, Chief Product and Content Officer of Deezer. ACRCloud’s state of the art music recognition technologies simplify the music searching process in HUAWEI Music and improve the user experiences. Wei Wu, Director of Consumer Cloud Service Music Business Dept., Huawei. Deezer, a Paris, France-based music. Sure that all artists and content creations have a fair playing field,” Deezer Chief Content and Strategy Officer Alexander Holland said in a statement. Alexander Holland, Deezer’s chief content and product officer, said:“Helping talented artists reach new and bigger audiences is one of the most rewarding things we can do as a streaming.

Available in more than 180 countries worldwide, Deezer gives instant access to the most diverse global music streaming catalogue on any device. Deezer is the only music streaming service with Flow, the unique mix of all your old favorites and new recommendations in one ever-changing stream.

The streaming business model is, at its heart, a revenue-share-based-on-consumption-share model. And at the moment consumption share is calculated on a service-wide basis.

Each month – for each product type in each market – a streaming service calculates what percentage of total listening was of recordings controlled by any one label or distributor. It then allocates that percentage of its total income to said label or distributor, sharing that allocation according to its revenue share agreement.

So if one label’s catalogue accounts for 20% of overall listening, 20% of total revenues is allocated to that label. If the label has a 55/45 revenue share agreement to its advantage, the streaming service then pays 55% of that allocation to the label. Which then needs to split the money between all the tracks streamed and pay whatever royalties are due to each artist.

With the user-centric approach, the same process is employed, but for each individual subscriber. So instead of every users’ payments and plays going into one pot before the sums are done, each subscriber’s monthly payment would be split between the artists whose music they actually listened to.

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The two approaches result in a different distribution of the monies mainly because, on any one platform, you have high-level users and low-level users, ie those who are streaming 24/7 versus those who stream for a few hours per week. To an extent, when it comes to royalty payments, the latter are subsidising the former. Which is to say, a chunk of the money paid by the low-level user is going to artists streamed by the high-level user.

Deezer’s new website championing user-centric royalty distribution attempts to illustrate the extent to which low-level users are subsidising high-level users, by allowing its premium subscribers to see how much of their monthly subscription fee is actually going to artists they listen to. The thinking is that most music fans would prefer – and possibly already assume – that money they put into the system goes to artists they actually listen to.

There has been plenty of debate in the music community in recent years about the pros and cons of shifting to a user-centric approach, especially since it became known that Deezer was both investigating and then championing such a shift.

Various people have been crunching the figures to ascertain what impact the shift would actually have on how all the money is shared out. Although different studies have reached slightly different conclusions, it does seem likely that user-centric royalty distribution would see top-level artists earn slightly less and lower level artists earn slightly more. User-centric would also likely benefit niche genres over mainstream genres, domestic repertoire over Anglo-American repertoire, and artists with older fanbases.

It wouldn’t make any difference to the streaming services, although it would mean that digital deals could no longer include per-play minimum guarantees, as they sometimes did, especially in the early days of streaming. And it probably wouldn’t make much difference to the bigger labels either, which – across their large catalogues – would likely see both the benefits and the downsides in a such a way that they would cancel each other out.

Many artists, songwriters and managers have argued that user-centric seems like a much fairer way to distribute streaming income, albeit usually with the proviso that they’d like to see more detailed figures as to what impact it would actually have.

Labels are more divided on the issue. And within the bigger labels there are differences of opinion across the group, because while the company at large might not really be affected one way or the other, individual units and departments could be winners or losers.

On its new website, Deezer identifies four main advantages of user-centric. Firstly, that it reduces “unfair revenue gaps that come from applying old ways of thinking to digital music”. Second, it would better “support local creators and niche genres”. Third it would promote “a diverse and vibrant music landscape”. And finally, it could help in fighting fraud.

The latter benefit of user-centric royalty distribution has become more newsworthy of late after revelations about how certain people have been scamming the system, not just to artificially boost the stats of any one artist, but to unfairly grab a slice of streaming monies.

Scammers create and upload their own catalogues of short tracks and then set up a stack of premium subscriptions that listen to that music 24/7. Under the current system they get back significantly more than the subscription monies they put in. But under user-centric, they could only ever get back their own subs, minus VAT and the streaming service’s cut.

Of course, there’ll be other scams, but that particular method of gaming of the system for profit would be ended by the user-centric approach.

Critics of user-centric usually lead with the argument “be careful what you wish for”, positing that there are more cons than people probably realise. Obviously, for starters, there is the fact that everyone – streaming services, distributors, labels, collecting societies etc – have set themselves up to calculate, administer and audit monies on a service-centric model.

What would the costs and implications be of shifting over to something new? Deezer argues that any challenges linked to switch-over will only increase as the streaming market continues to boom. Therefore, if the music community agrees it’s a fair way of doing business, better to make the switch now rather than later.

Plus, with industry-wide streaming monies still rising significantly each month at the moment, superstar artists who will take the hit under user-centric will still likely see their overall income go up, just not quite at the level it would under the current system.

There is also the downsize that, arguably, user-centric is slightly more complex than service-centric. And, as we know, digital licensing is already pretty damn complicated.

At the moment, although the idea of there being a per-play rate on any one streaming service is actually very misleading, you can make approximations in each market. So that, in the UK, a million streams is probably going to generate about £4000-£6000 across recording and song rights. With user-centric, what any one artist earns from a million streams will depend on the kind of fanbase they have – ie are they low-level or high-level streamers?

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Realistically, Deezer can only switch to user-centric if the majors buy-in, and – as referenced above – it seems that opinion is currently divided within those companies. But there are an assortment of indie labels and distributors already backing the streaming firm’s proposal to shift to user-centric for recording royalties in France next year.

France, of course, is the one market where Deezer has enough market dominance to put pressure on its label partners. And the consumer-facing communications campaign launched today might increase that pressure because, if a sufficient number of fans understand and support user-centric, it becomes harder for the superstars and big corporates to oppose it.

If Deezer does manage to persuade the record companies in its home country to switch to user-centric next year, the industry at large will watch that pilot with interest.

Obviously, Deezer’s ambition is to roll it out into other countries, and to also apply it to the way music publishers and songwriters are paid. If it did then have the positive impact that has been suggested on grassroots artists and niche genres, then pressure might mount on Deezer’s rivals to look into shifting over to a user-centric approach too. Though there’s still plenty of big “ifs” there.

Announcing the launch of the company’s new website on all things user-centric this morning, Deezer’s Chief Content & Strategy Officer, Alexander Holland, said: “Streaming has been the main innovation driver in the music industry for many years now. Digital technologies and data make it easier than ever to make sure that all artists and content creations have a fair playing field”.

“A user-centric approach is the next logical step”, he added, “and would mean that fans directly support the acts they love. Getting rid of bot fraud is a welcome added bonus and would make sure that your subscription money goes where it’s supposed to – the acts you love”.

The new website is here.

PRESS RELEASE ·

• Deezer study reveals people in the US are using podcasts to improve their mood, set a romantic ambiance and avoid loneliness while isolating
• During the lockdown period there was an increase in daily podcast listening, specifically relationship podcasts on Deezer
• Trauma expert and Survival Psychologist Dr. Sarita Robinson shares 6 tips to surviving self-isolation

Coral Gables FL, USA—The feelings of stress and loneliness posed by self-quarantine and the pandemic are natural. A quarter of Americans feel anxious since the coronavirus outbreak began. They are trying to deal with their feelings during the Covid-19 pandemic the best way they can. They seek comfort and are turning to other types of audio content to cope and create the best possible ambiance while home. These are some of the conclusions of a recent study commissioned by Deezer.

Deezer polled 11,000 users across eight countries¹ on how they were using the global streaming platform. It wanted to understand how users were looking after their mental health while isolating and the role podcasts were playing in their lives. The answer is that 38% of respondents in the US listen to podcasts to improve their mood.

Content that focuses on relaxation, mindfulness and self-improvement helped 53% of American users get through the lockdown. Relationship podcasts have seen a dramatic 145% increase in daily active users worldwide since the start of March. Americans are specifically between the world listeners that tend to cozy up to romantic audio content the most on Deezer (with more than half of their responses confirming to be the case). In terms of listening, 67% of men stream more romantic content, compared to 41% of women. There was also an increase in daily podcast listening, people are listening twice as long compared to the beginning of March - up to 40 minutes from 20 minutes on average.

Gen Z and Millennials data reflects they are suffering the most, so they are searching for self-care and well-being content to be able to sleep, chill out, and make positive changes in their lives. Additionally, of all the age groups polled people aged between 35-44 (47%) are listening to podcasts more often.

Finally, people in the US are around three times as likely to use podcasts to combat loneliness, compared to some European countries.

“No one is immune to depression and loneliness. The good news is that audio content can provide some relief when we need it the most. That’s why we curate dedicated playlists and channels for our users. After all, we’re in this together,” concluded Alexander Holland, Deezer’s Chief Content Officer.

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Regarding these results, Dr. Sarita Robinson, Principal Lecturer in the School of Psychology, University of Central Lancashire, said: “The rise in romantic audio content during isolation could be driven by increases in people’s oxytocin levels. During times of stress we are more likely to produce the love hormone oxytocin, and this in turn leads to more ‘tend-and-befriend’ behaviors.”²

“Audio content can help lift us up when we are feeling lonely. It is helpful as it breaks the silence which can become overwhelming. Podcasts act as a distraction and fill the time until we have the next phone call or video chat,” added the doctor.

The Covid-19 pandemic has led to months of lockdown, self-isolation and social distancing, causing a rise in mental health issues due to the difficulties of remaining resilient. Here are 5 tips to cope with the situation using audio content, according to the Survival Psychologist:

Stay connected Loneliness is one of the biggest challenges that people are facing during the pandemic. Americans are not only sharing audio content, but how are they feeling, drawing comfort from others, even when they are not physically present.

Feel positive vibes Listening to mood lifting audio content is recommended during difficult times as it helps us to feel happier by releasing endorphins, activating the pleasure and reward centers within the brain.

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Find comfort in the past Surprisingly, nostalgia can help reduce anxiety by reminding us of comforting personal memories. People are turning to music from their teenage years during the pandemic. Music from our past causes the brain to release feel-good hormones.

Distract yourself The doctor recommends limiting your news intake and listening to content that’s more light-hearted, as hard-hitting news can make you feel overwhelmed. Release any stress you are holding by playing upbeat songs or positive podcasts that inspire.

Achieve personal growth Crisis can be a catalyst for change. If you are having a period of self-reflection, embrace it and download inspirational podcasts to support the chapter of the new you.

If you are taking preventative measures and staying at home, don’t hesitate to visit Deezer’s ‘At Home’ channel. There, you will find music, podcasts, audiobooks and radio stations to keep you entertained, healthy and relaxed.

…

1: Global research by OnePoll of 11,000 audio content streamers in eight markets (Brazil, France, Germany, Egypt, UAE, Saudi Arabia, US & UK) during April 2020.

2: The word 'tend’ refers to tending to your offspring and 'befriend’ refers to seeking out social support during times of stress https://www.betterhelp.com/advice/behavior/what-is-tend-and-befriend-and-why-is-it-so-important/

This is a press release which we link to from our daily newsletter about podcasting and on-demand. This is reprinted verbatim; we may rewrite headlines and descriptions.

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