SoundCloud, UMG Discuss New Streaming Payment Model
Universal Music Group is, once again, looking for new ways to improve on the design of the current streaming model for artists. Earlier in January, UMG announced in part with Tidal “an an innovative new economic model for music streaming that might better reward the value provided by artists”. Then in March, UMG announced a full-on partnership with Deezer, with the aim to develop an “artist-centric” model for artists and rightsholders. Now, they are looking to work with SoundCloud to rework the current payment model used by streaming sites.
In the current payment model, all of the money (subscription, advertisement, etc.) is grouped together and distributed based on each artist’s total streams, which sounds the right way to do things, but some artists are finding ways to game that system, and it’s hurting the modern day music industry. UMG and SoundCloud have discussed a “multiplier” plan for artists who have a certain amount of pull over the next artists. For example, if Artist brings somebody to a platform to listen, then Artist should get multipliers on their views. Even stated on an WMG earnings call, CEO Robert Kyncl said, “It can’t be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof.”
The modern day music business and the artists it serves elevated quickly. Digital streaming came in a time when the industry was in decline, and as soon as it was realized that streaming was the future, they needed to wrangle in the process when it came to royalty payouts. It’s not perfect, nor does it have to be, but that doesn’t mean it can be improved. Streaming is still young and there’s plenty of time to make changes to the payment system to do right by, not only the artists, but the music industry as a whole.
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