ISLANDS IN THE STREAM
THE MUSIC BUSINESS BEGINS UNTANGLING THE MESSY CONUNDRUM OF STREAMING REVENUES.
LAST YEAR WAS A VERY GOOD one for music streaming: Audio streams increased 22.3% year over year, according to analytics firm Luminate, accounting for more than two-thirds of global music revenue. It was also the year when the music industry finally started to address the fact that the streaming model doesn’t benefit artists.
The way streaming works—platforms pool ad and subscription revenue then pay artists fractions of a penny per stream—has been contentious for a long time. But with a glut of new songs (many just white noise or generated by AI) now crowding onto streaming services, labels and streamers alike are finally working on new payment schemes. “All parts of the industry—not just artists, but labels and songwriters, publishers, and producers—are questioning ‘Is this the right way to arrange an industry?’ ” says Michael Huppe, president and CEO of Soundexchange, which collects and pays out digital performance royalties.
The most radical shift came from French music platform Deezer, which reoriented its payment plan last fall toward an “artistcentric” model, developed with Universal Music Group. Participating artists with 1,000 monthly streams from at least 500 listeners now get double royalties, as do songs that drive engagement with the platform. Deezer also demonetized filler content like white noise and is making its own functional music—tracks created with the aim of improving focus or helping people sleep—that will be excluded from the royalty pool. Soundcloud, meanwhile, has been championing its Fan-powered Royalties model, which divvies up payments based on how much a user listens to an artist.
Of course, “these different models are just redistributing the same pie,” Huppe notes. Music-tech company Createsafe, on the other hand, is hoping to create an entirely new pie, using generative AI. In partnership with the singer Grimes, the company launched Elf.tech, which lets artists use synthetic Grimes vocals in their music in exchange for 50% of the revenue that the song generates. Createsafe is now preparing to expand the platform behind Elf.tech to other artists who want to make— and license—their AI voices. —David Salazar