News

French study offers new data on impact of user-centric payouts


Tags:

One of the things that’s been clear in the debate about user-centric models for paying out streaming royalties – primer here if you need it – is that we need more studies based on recent data from big streaming services.

So, news this week of a new study commissioned by the National Music Centre (CNM) in France from Deloitte – using data from Spotify and Deezer – is encouraging, even if the findings aren’t the slam dunk that user-centric evangelists might hope for.

You can find the CNM’s page about the study here, with its topline findings and links to the full (French-language) report. Among the key findings: switching to a user-centric system would reduce the royalties paid out to rightsholders of the top 10 artists by 17.2% – they’d get 7.7% of the overall payouts rather than 9.3%. The result would be small percentage gains further down the pyramid: an average 1.3% increase for artists ranked 11-100; 2.2% for those ranked 101-1,000; 0.5% for those between 1,001 and 10,000; and 5.2% for those outside the top 10,000.

Woo-hoo! But wait: “If the percentages of change seem not insignificant, the amounts in value remain in reality limited,” warned the CNM in its summary of the findings. That 5.2% average increase for artists outside the top 10,000 would be “at most a few euros per year on average” for those musicians. It’s not THE solution for low streaming payouts in the long tail, in other words – something earlier studies of user-centric have also suggested.

There is plenty more to parse from this new study, such as the likely increases for genres like classical music, jazz, metal and blues (and corresponding drops for streaming’s biggest genres: rap and hip-hop). Meanwhile, catalogue music is a beneficiary, which – again, as indicated in previous studies – is one reason why user-centric might not be the redistribution of revenues from major labels to independents that might have been expected.

President Jean-Philippe Thiellay drew the conclusion that “the fight of authors, composers and performers, who demand better remuneration for their work, is not here today” – in other words, that user-centric is not a single solution for their complaints. However, the CNM says that this study is “a first step” towards more research, while noting that several streaming services “from the start of the study, indicated that they did not wish to participate in it”.

That’s disappointing, but it is a reminder of the other big problem with user-centric, which is that to even make a limited impact, it needs participation across the board. If DSPs (not to mention labels, publishers and PROs) can’t even back research together, the prospects for a commercial introduction look bleak.

Here’s something more encouraging though. We already know Deezer is a strong backer of user-centric payouts, but Spotify is now making positive noises too. “Spotify believes that artists and songwriters should have a voice in how the streaming economy operates,” a spokesperson told Music Ally, following the CNM study.

“While initial research around a user-centric payment model is limited and doesn’t show the dramatic shift many thought it might, if artists and songwriters prefer this model, we support conducting additional research and will keep an open mind. Of course, any change in payment model is a decision that would need broad industry alignment to make happen.”

Stuart Dredge

Sign up for Music Ally’s free weekly newsletter, The Knowledge – at-a-glance analysis of the modern music industry

Read More: News
Leave a Reply

(All fields required)