This is a guest post written by Martin Mills of Beggars Group, Darius Van Arman of Secretly Distribution, Stephan Bourdoiseau of Wagram Stories, and Emmanuel de Buretel of Because Music.
The news of the Universal/Deezer discussions has finally opened the door to a revamp of the streaming pay-out system. There are some problems with what they propose, but there are solutions to those problems, and if they are addressed, the new system has the potential to be revolutionary.
Although Universal and Deezer deserve credit for kickstarting this initiative, this should not just be an arrangement between one supplier and one DSP, formed in a vacuum. This should be universal with a small “u”, and should determine which side of the road we all drive on. The data which has driven this thinking needs to be made available to all those that need to buy in to this model.
Furthermore, in an environment where the current system has been criticised for not fairly or adequately supporting non-superstar artists and releases, any solution brokered by the biggest music company that appears to further consolidate revenues in the music industry has to be given a rigorous review by other rightsholders .
There are very large sums of money being made by those at the top of the streaming tree. It is normal in many walks of life for those who do well to subsidize those below them on the ladder. A limitation on payable streams, akin to a system of taxation, could be applied to the top ranks of streaming beneficiaries to flow a slice of incremental income into the pot, to the benefit of those newcomers that need time to create a fan base. This would in turn support the eco-system that makes the success of future stars possible.
An addition to what is proposed might be for DSP’s to charge a small flat amount for every track delivered, same to everyone, with that money going to the pot to recognize that there are costs to uploading and storing tracks that do not create value for the service. There’s merit in recognizing that those looking to make a career in music have different needs from hobbyists, but making that distinction will always be difficult. The key question is where do the thresholds come, and having access to the data model behind this proposal to evaluate the impact is crucial.
One of the main benefits of the proposed model is to recognize that we license a MUSIC service, for users to access the world’s recorded music catalogue, not to access any audio or sound. If services want to provide a wider audio functionality to their users they are free to do so, but it shouldn’t be taking a slice of music subscription revenues. This, along with a more determined approach to reduce fraud, money laundering and piracy on music services, should deliver real benefits back to the music industry and disincentivise those who are gaming the system under the existing model and taking revenues that should go to real artists.
The key to unlocking a more sustainable streaming economy for everyone is the services increasing the size of the pot. Price rises are at last happening, which is to be welcomed, and there is room for this to be happening on a more frequent basis in all markets and by all DSP’s.
The most avid music fans are willing to pay more for what they love, and independent labels and their artists super-serve the most passionate fans every day. We would welcome constructive discussions on how we unlock this unpaid value. At the same time, we can’t penalise the artists that the most passionate fans stream most. Separating these from those accounts that game the system via automated and fraudulent plays or stream all day long as an (unlicensed) business user is fundamental.
Adding these elements to the other smart provisions of the Deezer deal on de-monetising non-musical content, differentiating push and pull plays, and anti-fraud provisions, could increase the size of the pot in a way that would benefit all the participants who bring value to music services.
Martin Mills – Beggars Group
Darius Van Arman – Secretly Distribution
Stephan Bourdoiseau – Wagram
Emmanuel de Buretel – Because Music