Artist-Centric Payment – The future of streaming revenue?
Music streaming platforms are evolving rapidly, with innovative payment models aiming to better serve both artists and audiences. As the industry contemplates moving away from the conventional Pro-Rata model, the User Centric Payment System (UCPS) and Deezer's Artist Centric Payment Model have emerged as promising alternatives.
The Prevailing Pro-Rata Model
The Pro-Rata system, fueled by a mix of subscription fees and ad revenues, has long been the norm. While this model financially tends to benefit mainstream artists like Taylor Swift and Drake, it often sidelines emerging talents. Critics claim this method rewards popular artists too generously, limiting opportunities for up-and-comers or artists out of the classical music world.
The rise of User Centric payments
The UCP model has been gaining traction, notably due to PRO MUSIK's "Payment Option Transparency" study. Unlike Pro-Rata, UCPS divide individual subscription fees, allocating them to artists based on each subscriber's specific streaming habits. For instance, if Artist A represents 10% of a user's total streaming time, they'd receive 10% of that subscriber's fee.
Deezer spearheads the artist centric payment initiative
In collaboration with Universal Music Group, Deezer is set to pilot its Artist Centric Payment system in France by the end of 2023. This model:
- Focuses on rewarding "professional artists" with consistent streams.
- Offers doubled payouts for songs chosen by fans over algorithm-generated tracks.
- Excludes "non-artistic noise content" from royalty computations.
- Bolsters fraud prevention measures.
- Implements quality control, especially limiting non-artist content.
With platforms like Spotify, Deezer and Apple Music leading the charge, music streaming is on the brink of significant change. The potential adoption of UCPS or ACPS promises artists a different share and fans a more immersive experience.