In a significant move for the music industry, Universal Music Group (UMG) has introduced a new royalty system that aims to divert more money toward professional artists and away from content that “can barely be considered music.” This comes after concerns raised about the quality of music streaming platforms being inundated with bots and low-quality soundtracks. The deal with French streaming service Deezer will pay more for songs and artists that listeners actively search for, and UMG expects to announce similar deals with other streaming platforms in the coming months.
According to industry experts, this shift toward an artist-centric model is the biggest change to the music streaming model in 15 years. The current system treats all streams equally, regardless of the quality or popularity of the content. UMG’s new payment system aims to dissolve financial incentives for AI-generated tracks to multiply on streaming platforms. JPMorgan warns that if left unchecked, Spotify’s platform could be inundated with AI-generated garbage, potentially growing from 100 million songs to more than one billion.
The introduction of this new model is expected to benefit both musicians and UMG itself. JPMorgan has raised its stock forecast for UMG, estimating that the new payment system could boost subscription revenue by 9%. In a “dystopian AI future” where streaming platforms are flooded with low-quality clips, this new model could increase UMG’s revenue by more than 20%. Deezer plans to implement these new payment terms in October.
This move by UMG signals a shift in the music industry as major labels and streaming platforms adapt to changing dynamics in the streaming market. Industry leaders believe the terms established with streaming platforms more than a decade ago are now outdated. By redirecting more money toward professional artists, UMG seeks to stabilize the industry and take advantage of recent advances.
Sources: Financial Times, Midia
2023-09-09 15:31:48
#Universal #Music #Group #Introduces #Royalty #System #Support #Professional #Artists
