Everyone has their own definition of music. For those who like to meditate, the sound of falling rain can be a source of wonder, while many babies will only fall asleep to the humming noise of a car or washing machine. But should those who create these recordings be paid the same as the Belgian singer Stromae for one of his songs or Keith Jarrett for one of his performances? Somewhere between noise and music, there is an artist trying to make a living from his art, a challenge further amplified by the advent of digital technology.
The deal struck on Wednesday, September 6, between the world’s leading music producer Universal and the French music streaming platform Deezer is an attempt to provide an initial response. It paves the way for major changes in the still shaky economic model for music streaming.
From now on, tracks by professional artists, i.e. those generating 1,000 streams per month from 500 separate listeners, will be paid double what they previously were. And if you actively search for Billie Eilish’s latest hit using the search function or by adding it to your list, she’ll be paid double again – four times more than she currently is. The idea is to distinguish noise from artists, to fight against algorithms and artificial intelligence that try to take advantage of the system and obviously to provide better remuneration for artists. This is a recurring demand the world over from artists who have suffered as a result of the transition from CDs to streaming services. On average, 1,000 streams generate less than €5 in royalties for the artist.
Greater concentration
This commendable objective will only be achieved if the other big record companies and major platforms get on board. Deezer represents less than 2% of the global market, far behind Apple, Tencent and Amazon, and even further behind the leader, Sweden’s Spotify and its 550 million users. Universal will try to convince them.
But beyond that, the entire digital music ecosystem needs to be revisited. It’s not normal for Spotify to be having such huge success in terms of audience numbers and yet incapable of making money. In the second quarter, it posted losses of $302 million (€282 million), while its revenues grew by 11%.
Gone are the days when investors and the stock market would throw money at start-ups with failing business models. Even the leaders in their sectors, from Amazon and Uber to Netflix, Deliveroo and Spotify, have to demonstrate their ability to survive without resorting to the increasingly closed pockets of financiers. For artists, digital technology, initially promising diversity, is now resulting in increased consolidation. Taylor Swift is making a killing, as is Apple and Amazon. For Spotify and even more so for Deezer, the time has come to move on.
