The CNM publishes a study on the impact of a possible change in the way artists and rights holders are remunerated by streaming platforms.
A study to objectify the debate with comparable data
With the evolution of music listening habits, online music services have experienced very strong growth in recent years, reaching 59% of the recorded music sales market in 2019 (SNEP study, The economics of music production in 2019, 2020 edition). Their growing weight in the music
economy has raised questions about how these companies allocate revenues from subscriptions to their services.
➔ Two distribution models
Revenues generated by streaming are now distributed to the rights holders in proportion to their market share (number of streams generated for the rights holder’s catalogue compared to all the streams generated on the platform), according to the Market Centric Payment System (MCPS) model. By definition, this model of distribution favours artistic proposals with the most committed audience and contributes to boosting revenues from streaming to titles listened to by heavy users
of online music services.
For several years, music professionals have been campaigning for an alternative model, known as the User Centric Payment System (UCPS), which consists of distributing the tax-free amount of each subscription according to the user’s actual listening: the user’s
subscription is distributed only to the rights holders of the tracks he or she listens to.
➔ An objective and independent study
Several studies1 have been carried out in France and Europe on the consequences of switching from one model to another for streaming revenues and diversity of supply. However, they have been carried out on the basis of different methodological choices, data perimeters and temporalities.
Therefore, their results, which are often contradictory, cannot be compared and do not allow this reflection to be objectified.
In this context, the Centre National de la Musique, as an observatory of the music sector in France, has carried out a study piloted jointly with the Ministry of Culture. Launched in April 2020, this study aims to carry out a comparative and objective analysis of the implications of the two systems, particularly with regard to their impact on diversity. Conducted with the support of Deloitte, the study was carried out in a concerted framework with professionals, thanks to the contribution of representatives of different professions in the sector: artists, producers, labels, distributors, collective management organisations and online music platforms.
Some online music services have, from the outset of the study, indicated that they do not wish to participate in it, or do not have the resources to process their data for the implementation of a common methodology. Only Deezer, Spotify and Sacem agreed to participate in the provision of
data, the development of the common methodology and, for both platforms, its execution2.
Main findings of the study
Beyond a few methodological issues deliberately left outside the scope of the analysis (see presentation of the method in our file), the study leads to the following conclusions:
Follow-up action
The study objectifies a number of points thanks to the application of a transparent and clear methodology. This is an important first step that all actors must take up in a logic of solidarity and
development.
The CNM intends to continue and amplify this work in close consultation with all the players and for the benefit of the entire music industry in order to:
The CNM has undertaken an extension of the observatory of musical diversity produced and
exhibited, which will be implemented during the course of the year 2021 and which will allow it to
make progress on the provision of data that is currently lacking. It also proposes to initiate a
prospective reflection with all the players in the sector on the sustainable conditions for the development of streaming, on the transparency of recommendation methods and on the fight
against fraud, for which it could play the role of a trusted third party.
[1] “User-centric settlement for music streaming”, Clouds and Concerts, March 2014.
“Music streaming in Denmark: An analysis of listening patterns and the consequences of a “per user” settlement model based on streaming data from WiMP”, Roskilde University, 2014.
“Pro Rata and User Centric Distribution Models: A Comparative Study” Digital Media Finland, November 2017.
Unpublished internal studies: Deezer, Spotify, Sacem, Merlin
[2] This execution could not be carried out homogeneously. Deezer carried out the common methodology on the basis of a complete
sample (year 2019 and completeness of the parameters) and within the defined parameters. S
Spotify, for its part, initially implemented its own methodology, with a scope that included all users, paying and non-paying, as well as
different axes and analysis parameters.Nevertheless, in order to be able to compare the results with those of Deezer, the common
methodology was carried out on a random sample of 100,000 users provided by Spotify on French consumption in the first half of
2019.