UMG confirms Deezer deal to explore new economic models for streaming


We already knew that Deezer had signed on to become the second music streaming service working with UMG to explore new payout models. UMG said so in this month’s quarterly earnings call. Now it’s official, with an announcement this morning.

“An initiative between the two companies to investigate potential new economic models for music streaming that more fully recognise the value artists create,” is how UMG described the Deezer partnership today, which follows its similar deal with Tidal.

“UMG and Deezer aim to develop new methods that holistically reward recording artists and songwriters for the value they create and to reimagine and update the engagement model for Deezer’s users and the artists they love.”

Deezer was famously an early advocate of ‘user-centric’ payouts, although its efforts to launch a pilot in France were stymied by the unwillingness of one or more (depending which rumours you believe) major labels to take part.

UMG has reservations about the user-centric model, but is thought to be keener on exploring ‘bonus pools’ of royalties for artists that are driving most value for the streaming services, and ‘superfan tier’ streaming subscriptions.

This seemingly chimes with what Deezer is working on. In fact, today’s announcement mentions “super fan rewards, in-app livestreaming and VOD concerts” as some of the projects it’s already working on.

Deezer also seems happily on board with UMG’s new campaign against what its boss Sir Lucian Grainge called “lower-quality functional content that in some cases can barely pass for ‘music’… generic music that lacks a meaningful artistic context”.

“The current system has clear issues that need to be addressed, such as increasing amounts of non-music tracks uploaded on platforms, poor quality covers with misspelt artists’ names and songs to ‘steal’ streams, and people trying to trick the system with the length of tracks,” said Deezer CEO Jeronimo Folgueira today.

“This hurts true artists, makes it harder for new ones to emerge and also damages the fan experience.”

How a service like Deezer cracks down on that content in response to UMG’s complaints is just as interesting a question as what kind of new payout models it might develop.

Written by: Stuart Dredge