An interior shot of Deezer’s Paris headquarters. Photo Credit: Deezer
Last week, Deezer formally revealed that its “artist-centric” model would incorporate a 1,000-stream monthly listenership cap when calculating royalties. Now, amid reports that Spotify’s own royalty pivot is set for Q1 2024, some are discussing whether a per-user stream limit will effectively prevent fraud.
Deezer’s stream cap reentered the media spotlight last week, when DMN was first to report on a broader partnership between the Paris-headquartered service and SACEM. Previously, Deezer and Universal Music had emphasized different elements of their jointly developed model, chief among them the “double boost” on royalty payments for “professional artists.”
(Separately, the details of individual artist-centric licensing agreements, which select parties say they’re uninterested in exploring, may well vary.)
But upon disclosing its artist-centric tie-up with SACEM, Deezer acknowledged the decidedly significant “monetization cap of 1000 streams for each user, no matter how much they stream each month.” This approach, the Access Industries subsidiary maintained, would produce “a fairer revenue share between artists” and decrease “the risk of streaming fraud.”
When speaking with Billboard last month, Deezer CEO Jeronimo Folgueira indicated that his business had arrived on the 1,000-stream threshold after analyzing multiple years of music-consumption data.
“‘A normal human will consume anywhere between 400 and 600 tracks per month,’” the Deezer head communicated, “‘so we’ve set the threshold at 1,000. At 1,000, more than 90 percent of the behavior is captured and then only the outliers go beyond that.’”
Folgueira also touched on the repeat-heavy listening habits of K-pop diehards, a number of whom appear to participate in consumption campaigns coordinated at least in part on social media. Regarding the exact nature of the stream cap, though, the CEO of approximately 30 months drove home that “‘if you listen to 2,000 streams, then your streams will count half.’”
“‘That way, you cannot have one account racking up 10,000 streams and stealing money from the pool,’” proceeded the former RTL Group exec, whose current company reportedly added about 500,000 subscribers during Q3 2023.
Of course, time will reveal the cap’s precise effectiveness in curbing fraud – especially as Deezer expands artist centric to markets beyond France. In theory, the step, which seems to resemble SoundCloud’s fan-powered/user-centric system, would presumably address fraud and, perhaps just as notably, curb committed listeners’ royalty-payout impact.
Although the fan-powered model makes sense on paper – particularly as major-label acts rack up millions and even billions of plays while benefiting from massive marketing budgets and contractually guaranteed spots on key playlists – studies have shed light upon unintended compensation consequences associated with the framework.
The potential for unforeseen considerations is worth keeping front of mind as Deezer explores a dramatically different royalty model and as platforms including Apple Music adopt changes of their own. Plus, as highlighted at the outset, Spotify is reportedly weighing a system that would only pay for streams on tracks that hit a certain number of annual plays.
According to critics, these and adjacent measures function as entry barriers for new and emerging artists. Potentially contributing to the distinct possibility of alienating unsigned and indie acts in the long term is the continued rise of TikTok Music and TikTok proper, which today announced a promotion-focused global deal with DistroKid.
