State Champ Radio Deezer
Page: 2
French music streaming company Deezer’s revenue increased 11.0% (13.0% at constant currency) to 134.0 million euros ($147.3 million) in the third quarter, the company announced Wednesday.
That was slightly slower than the 15% growth rate in the second quarter and first quarter but ahead of the 7.4% revenue growth the company posted in calendar 2023.
Partnerships accounted for most of the quarter’s improvement by growing 21% to 41.5 million euros ($45.6 million). Deezer powers music streaming services for such companies as Germany’s RTL and Argentinian e-commerce company Mercado Libre. Through partnerships, Deezer offers its branded service to the likes of DAZN, a sports streaming platform, and Mexican mobile carrier WIM, whose customers get a 20% discount on Deezer Premium.
Trending on Billboard
Subscriber growth was helped by the conversion of “the first cohort of MeLi+ subscribers from trial accounts to premium accounts with higher margins,” said CEO Alexis Lanternier during Thursday’s earnings call. Also, Lanternier added, the Mercado Libre partnership, which provides 12-month trials, has produced results “higher than our initial expectations.”
Revenue from France was 78.5 million ($86.3 million) and 58.6% of total revenue, down from 59.4% in the prior-year period. The rest of the world generated revenue of 55.5 million euros ($61 million). The “other” category was 6.7 million euros ($7.4 million), up 63.8%, in part due to new verticals such as its wellness app, Zen.
The growth in France and contraction in the rest of the world is part of the plan, said CFO Carl de Place. “The strategy has been to improve the profitability and moving to positive profitability for Deezer, which has made us be more selective in the way we invest, in terms of marketing and making sure we invest in markets where we can see that the return on the investment is positive for for this. So that’s the reason why we are growing in France and over the rest of the world has been declining.”
Direct subscribers represent the majority of Deezer’s business but grew at a slower 4% to 85.8 million euros ($94.3 million). The number of direct subscribers rose 4.1% to 9.9 million; 5.2 million of them came from Deezer’s home market of France while the rest of the world produced 1.8 million subscribers, down from 2.0 million in the prior-year period. Deezer’s subscriber base took a hit because the company removed 400,000 “inactive family accounts,” but the company explained that the move had no impact on revenue and benefitted gross margin.
Despite the positive momentum in the quarter, the company chose to maintain its guidance from the previous quarter. Deezer forecasts 10% revenue growth in 2024 and expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to improve to a loss of 10 million euros ($10.9 million) and plans to have positive free cash flow.
Deezer was among the first music streaming platforms to raise prices in 2022 and did so again in 2023. There will be “potential for price increases” as Deezer continues to “upgrade the experience to add value to the user,” said de Place.
Following the release of third-quarter earnings after the market’s close on Wednesday, Deezer’s share price was practically unchanged, falling just 0.4% to 1.345 euros ($1.46) on Thursday. Year to date, Deezer’s stock price has fallen 36% from 2.095 euros ($2.27) per share.
Deezer’s third quarter financial metrics:
Revenue: up 11% to 134 million euros ($147.3 million)
Total subscribers: up 4.1% to 9.9 million
Direct subscribers: down 1.4% to 5.2 million
Partnership subscribers: up 11% to 4.7 million
Direct subscriber average revenue per user (ARPU): up 5.8% to 5.40 euros ($5.90)
Partnership subscriber ARPU: down 4.7% to 2.80 euros ($3.10)
French music streamer Deezer reported a nearly 15% increase in revenue for the first half of 2024 and raised a key financial target for the year, according to earnings results filed on Tuesday (July 30).
The Paris-based company generated 268 million euros ($287 million) for the six months ending June 30 — up $35 million from the year-ago period — as average revenue per user (ARPU) improved for both direct subscribers and business-to-business subscribers by 6% and 3.5%, respectively.
Deezer executives called it a strong financial performance and said the company is on track to become profitable, as it was free-cash-flow positive in the first half of the year, with around 65 million euros ($70.4 million) at the end of June.
Trending on Billboard
“These positive results are [due to] strong performance throughout Deezer,” Stu Bergen, interim CEO of Deezer, said in a statement. “Deezer occupies a distinctive position within the music ecosystem,supporting artists, songwriters and rightsholders alike through initiatives focused on transparency, fairness, and innovation.”
Available in more than 180 markets, Deezer’s roughly 10.5 million subscribers was flat from the prior quarter.
The company raised its target for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to a 10 million euro deficit, compared to Deezer’s previous expected deficit of 15 million euros for 2024, and reiterated its target to grow revenue by 10% for the year. Deezer generated 485 million euros ($525 million) of revenue in 2023, a 7.4% increase from 2022.
Last week, Deezer announced that ex-Walmart executive and consumer goods company founder Alexis Lanternier would become the streaming company’s next CEO, taking over from Bergen, who served as interim CEO after the previous CEO, Jeronimo Folgueira, left the company in February following a nearly three-year run in the role.
Lanternier co-founded and developed Branded, a digital-first consumer goods company, and was previously an executive vp at Walmart Canada.
Alexis Lanternier was named CEO of French music streamer Deezer, replacing interim CEO Stu Berger, the company announced Thursday (July 25). Lanternier, who will be based at Deezer’s Paris headquarters, most recently co-founded and developed Branded, a digital-first consumer goods company. Prior to that, Lanternier was an executive vp of Walmart Canada e-commerce and also […]
French music streamer Deezer reaped the benefits of its price increases as its first-quarter revenues grew 15.0% to 132.5 million euros ($143.5 million at the average exchange rate for the period). Average revenue per user (ARPU) also improved for direct subscribers and business-to-business subscribers from partners including Brazilian mobile carrier TIM and French retailer Fnac Darty.
Deezer raised subscription prices in France, its largest market, in January 2022 and other markets later in the year. After Apple, Amazon, YouTube and Spotify all followed with their own increases, Deezer raised its prices again in September 2023.
In the first quarter, ARPU for direct subscribers grew 6.4% to 5.1 euros ($5.50) as the latest price increase was implemented for over 75% of them, while ARPU from partnerships improved 5.5% to 2.9 euros ($3.1). Both ARPU figures have grown considerably in the last two years. Since the first quarter, direct ARPU has grown 13.3% from 4.5 euros ($4.9) and partnership ARPU has improved 20.8% from 2.4 euros ($2.6).
Trending on Billboard
Partnerships produced most of Deezer’s revenue growth in the quarter. While direct revenue from paid subscriptions grew 5.2% to 86 million euros ($93.1 million), partnerships revenue grew 40.3% to 43.3 million euros ($46.9 million); Deezer provides its streaming platform for its partners’ branded products. The company attributed partnerships growth to a recent deal with Mercado Libre in Latin America, RTL in Europe and Sonos. The company also renewed deals with TIM and Fnac Darty in the quarter.
The first quarter improvement “highlights clear momentum and evidence that our strategy is on point,” said interim CEO Stu Bergen in a statement. “By delivering unique experiences to music fans worldwide, Deezer delivers value and innovation to all our stakeholders. We continue to be a catalyst for positive change, challenging the status quo in remuneration and pricing, while maintaining our unwavering support for artists and songwriters.”
France accounted for the majority of Deezer’s revenue (57.4%), though revenue in the country grew just 8.5% to 76.1 million euros ($82.4 million) from the prior-year period. Revenue in the rest of the world jumped 25.2% to 56.4 million euros ($61.1 million) and accounted for 42.6% of revenue, up from 39.1% of revenue in the first quarter of 2023.
Although a relatively minor player on the global music streaming stage, Deezer has been influential in the music industry’s efforts to make streaming a more sustainable endeavor for musicians. In 2023, Universal Music Group partnered with Deezer for an artist-centric royalty scheme that aims to provide better royalties for professional musicians. Independent rights group Merlin followed in March.
Part of providing better remuneration to professional artists is removing non-music tracks (also called functional music) from the platform and Deezer’s earnings release confirmed the company has removed over 26 million tracks (non-artist content, noise and duplicates) since October 2023. The company also “enforc[es] a stricter provider policy to ensure exceptional quality content and elevate the user experience,” according to the release.
Looking ahead, Deezer maintained its previous guidance given in February: Adjusted EBITDA is expected to be better than -15 million euros (-$16.2 million) — about half of the -29 million euros (-$31 million) in 2023 — and revenue growth is expected at 10%, which would be an improvement from the 7.4% revenue growth it saw in 2023.
Merlin and Deezer announced a new partnership through which Deezer’s artist-centric royalty model will be integrated across Merlin’s membership of independent record labels, distributors and other rights holders. The model, which is currently being rolled out in France, is designed to reward artists and tracks that are viewed as playing a part in attracting and retaining subscribers to the platform while excluding white noise and other types of “functional” audio from the royalty pool.
“We have worked with Deezer to ensure their new model works for the benefit of our members, representing a path forward in ensuring that high-quality music, and the artists who create it, are recognized and rewarded in the manner they deserve,” said Merlin CEO Jeremy Sirota in a statement.
Trending on Billboard
Added Deezer CEO Jeronimo Foglueira: I’m very happy to see that Merlin and its members are embracing Deezer’s artist centric model and joins us in redefining artist remuneration in the streaming era, to make sure artists are paid more fairly for their music.”
Warner Music India made a strategic investment in Global Music Junction (GMJ), the music and entertainment subsidiary of digital entertainment and technology company JetSynthesys. The move gives Warner Music India a seat on the board of GMJ and expands its partnership with the company, with which it previously struck a distribution deal in 2021. GMJ — which provides services including content creation, events management, innovative distribution, marketing solutions, technical analytics, and legal expertise — is a leader in the music markets for the Bhojpuri, Kannada, Gujarati, Haryanvi and Oriya languages. “This is a significant milestone in the expansion of our presence across India,” Alfonso Perez Soto, president of emerging markets at Warner Music, said in a statement. “Working with the amazing team at GMJ last year not only strengthened our partnership, but enabled us to better support artists from the central regions of India, bringing them the best artistic support that any company can provide, and helping them connect with fans across the country and around the world.”
AEG Presents and LIV Golf announced an exclusive multi-year partnership that will see AEG and its subsidiary, Concerts West, booking musical acts and producing concerts for LIV Golf events globally. Since launching the LIV Golf Invitational Series in 2022, followed by the official kickoff of the LIV Golf League last year, artists including Zac Brown Band, Tiësto, Nelly, Sebastián Yatra and Alesso have performed at LIV Golf events. Starting this spring, AEG Presents and its Concerts West subsidiary will book musical acts and produce concerts for LIV Golf tournaments worldwide, handling talent booking, artist management, show/venue planning, creative development and technical production.
The City of McKinney, Tex., which is a major hub in the Dallas-Fort Worth area, chose Notes Live to build what will be the company’s largest venue yet: the 20,000-capacity, $220 million open-air Sunset Amphitheater. The effort to bring the venue to McKinney was a joint effort between the city, the McKinney Economic Development Corporation and the McKinney Community Development Corporation. Construction on the Sunset is slated to begin late this year, with the aim of opening it in time for the concert touring season in 2026. The project is expected to support more than 1,300 direct and indirect jobs and create $3 billion in regional and local economic activity in its first 10 years of operation.
Audio entertainment platform Pocket FM raised $103 million in Series D funding led by Lightspeed with participation from Stepstone Group. The latest round brings Pocket FM’s total funding to date to $196.5 million. The money will support the company’s push into the U.S. market while also supporting its expansion into Europe as well as Latin American markets in 2024. Pocket FM will also continue to strengthen its exclusive content library and build AI-powered personalized recommendations to enhance the user experience. The company claims to have surpassed $150 million in annual recurring revenue and says the platform racked up more than 75 billion minutes of streaming worldwide last year.
Warner Music South East Europe acquired a minority stake in Slovenian independent label NIKA. The label boasts a repertoire of more than 11,000 songs, including tracks from Big Foot Mama, Koala Voice, Luka Basi, Nipke and Siddharta. The label’s releases are currently distributed through Warner’s indie distribution and label services arm ADA. The deal will allow Warner Music to upstream NIKA’s roster to its international network. NIKA has been Warner Music’s licensee in Slovenia since 1995.
Melissa Etheridge partnered with Gritty In Pink, which powers the INPINK marketplace — a platform, described as being similar to Upwork, where female freelancers in music can find jobs. Through the partnership, female videographers can submit an INPINK listing to showcase their work to be considered for a job capturing and editing content at Etheridge’s upcoming shows in Santa Clarita, Calif., and Thousand Oaks, Calif. Those interested can submit their listings between Mar. 20 and Mar. 28. Etheridge will also serve as a “strategic advisor” for the INPINK marketplace. Prior to the partnership, the singer-songwriter hired an INPINK videographer to shoot her tour last year and ran a photography campaign with INPINK to find a female photographer to take press photos.
ASM Global signed a strategic partnership with King Abdullah Financial District Development and Management Company (KAFD DMC) to lead the operation and management of the King Abdullah Financial District (KAFD) Conference Center in Riyadh, Saudi Arabia. The conference center includes a 1,215 square-meter banquet hall, a 600-seat auditorium and multiple outdoor plazas.
NightEvolution — which owns Ibiza dance music clubs Amnesia and Cova Santa and Amnesia’s in-house night Pyramid — joined forces with Dubai developer Sekoya Management, which owns Dubai venue Soho Garden and its electronic music sub-brands/venues Code, Playroom and Hive. Under the agreement, NightEvolution and Sekoya will present a new events series called Horizon in Ibiza, Dubai and elsewhere.
AI-powered beat and track generator SOUNDRAW drew $3 million in new funding led by Carbide Ventures, along with other investors including mint VC, Ceres, iSGS, SMBC Venture Capital, Deepcore, Kazuomi Kaneto and Paul Rosenberg, CEO of Goliath Artists and president of Shady Records.
French streaming company Deezer‘s revenue grew 12.1% to 130.7 million euros ($141 million) in the fourth quarter, bringing its full-year revenue to 484.7 million euros ($524 million), up 7.4% year over year, the company announced Wednesday (Feb. 28).
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
Full-year adjusted earnings before interest, taxes, depreciation and amortization (ABITDA) was roughly halved to -28.8 million euros (-$31 million) and net loss was cut by almost two-thirds to 59.6 million euros ($64 million).
This year, Deezer expects to achieve a 10% growth in revenue — to roughly 533 million euros ($575 million) — and again halve adjusted ABITDA to -15 million euros (-$16.2 million) behind improved gross margins and cost controls.
Trending on Billboard
Deezer’s subscriber count grew 11.5% to 10.5 million from 9.4 million at the end of 2022. The entire gain in subscriptions came from business-to-business partnerships, which grew by 1 million to 4.8 million. Last year, Deezer launched new partnerships with home audio company Sonos, media company RTL in Germany and e-commerce company Mercado Libre in Brazil and Mexico to power those companies’ branded music streaming services. It also renewed partnerships with mobile carrier TIM in Brazil, retailer Fnac Darty in France and mobile carrier Orange in France.
Average revenue per user (ARPU) from B2B subscribers rose from 2.6 euros ($2.81) to 2.8 euros ($3.03) per month. “Our partnership strategy is bearing fruit, driving our overall growth and helping us win market share outside France,” CEO Jeronimo Folgueira said in a statement.
Deezer’s direct subscribers remained flat at 5.6 million but those user’s ARPU increased from 4.7 euros ($5.09) to 4.9 ($5.31) euros per month. Last year, the company raised monthly subscription fees in France, Spain, Italy and the Netherlands from 10.99 euros to 11.99 euros with “minimal churn” on its subscriber case, according to the earnings release.
The company also announced Wednesday that Folgueira is stepping down “to pursue personal projects.” Folgueira joined Deezer as CEO in 2021. During his tenure, Deezer went public through a merger with a special purpose acquisition company, I2PO, in 2022, and forged a partnership with Universal Music Group in 2023 to introduce an artist-centric model for royalty calculations.
Shares of Deezer rose 0.5% to 2.18 euros ($2.36) Wednesday before the company released earnings results. The stock has almost doubled its 52-week low of 1.19 euros ($1.29) on April, 2023, 13 but is well below its 52-week high of 3.19 euros ($3.46) set on Nov. 2, 2023.
Jeronimo Folgueira is resigning from his position as CEO of the streaming service Deezer, the company announced Wednesday (Feb. 28). Folgueira previously held the role of CEO and director of the board at Spark Networks — an online dating company — before he joined Deezer in 2021. ”I am extremely proud of what we have […]
Deezer shares fell 6.4% this week after France’s National Assembly approved a 1.2% tax on streaming revenue on Tuesday (Dec. 19). The new tax, which is meant to support local cultural programs, taxes effect in January and will be owed on top of existing tax obligations.
Deezer CEO Jeronimo Folgueira called the tax “the worst possible outcome of all the different scenarios” the company faced from the French government. “Adding taxes is the worst way of trying to support the industry,” he told Billboard. France is Deezer’s home and largest market, accounting for roughly 60% of its revenue in the first nine months of 2023, according to the company’s latest earnings report.
Spotify immediately pulled sponsorship support for two local music festivals to help offset the additional tax burden. France is not as important to Spotify as to Deezer, however, and the new tax was probably not a factor in the 1.3% decline in Spotify’s share price this week. Spotify would be far more affected if other countries followed France’s lead — a possibility raised by Deezer’s Folgueira. “It sets a very dangerous precedent for other markets,” he warned.
SiriusXM investors were unfazed by the news that the New York attorney general’s office had sued the company for allegedly making customers go through a “burdensome” cancellation process. The satellite radio company’s stock finished the week up 1.3% to $5.47 despite a lawsuit that alleges SiriusXM “deliberately wastes its subscribers’ time even though it has the ability to process cancellations with the click of a button.” The company said it will “vigorously defend against these baseless allegations” that “grossly mischaracterize” its practices.
The Billboard Global Music Index fell 0.3% to 1,517.98, lowering its year-to-date gain to 30.0%. Nine of the index’s 20 stocks posted gains this week; 11 stocks ended the week in negative territory.
Shares of streaming company LiveOne gained 10% to $2.21 after the company on Tuesday (Dec. 19) raised its guidance for revenue for its fiscal year ended March 31, 2024, to a range of $118 million to $120 million, up from $105 million to $110 million. The company also said that it’s finalizing a restructuring of its merchandising business, first announced on Dec. 14, that will reduce headcount by 75 to 100 staffers and result in $5 million to $10 million of cost savings.
Three other companies in the Billboard Global Music Index posted gains of 5% or more this week. Sphere Entertainment Co. rose 5.4% to $34.32. Warner Music Group improved 5.1% to $35.29. And K-pop company SM Entertainment gained 5% to 90,100 won ($69.32).
Major indexes fared better than music stocks as investors reacted positively to Friday’s announcement by the Federal Reserve that U.S. prices rose less than expected in November. In the United States, the Nasdaq composite gained 1.2% to 14,992.97 and the S&P 500 improved 0.8% to 4,754.63. In the United Kingdom, the FTSE 100 rose 1.6% to 7,697.51, while South Korea’s KOSPI composite index climbed 1.4% to 2,599.51.
The French government’s decision to impose a new tax on music streaming platforms will be highly damaging for the country’s music industry and sets a “dangerous precedent” for other markets, warn streaming executives opposing the levy.
France’s National Assembly officially approved the tax charges on Tuesday (Dec. 19) as part of the country’s 2024 finance bill.
It specifies that streaming services such as Spotify, Deezer and Apple Music earning above 20 million euros ($22 million) in annual turnover will have to pay a new tax charge of 1.2% on all streaming revenue generated in France in addition to their existing tax duties. Social media platforms like Facebook and TikTok which license and feature music will also be subject to the tax charges.
The money will be used to help fund a national body to support the French music sector, The Centre National de la Musique (CNM), which was created in 2020 and is already partly financed by the live music industry.
The new levy comes into effect from Jan. 1, although music streaming services are still waiting for confirmation of when the first payment will be due to the French authorities.
‘A REAL BLOW’
Deezer CEO Jeronimo Folgueira says the tax on streaming platforms’ earnings will have “negative consequences for the entire music industry in France.”
“It is the worst possible outcome of all the different scenarios that we could have ended up with,” Folgueira tells Billboard. “Adding taxes is the worst way of trying to support the industry. It sets a very dangerous precedent for other markets.”
In a statement, a spokesperson for Spotify France called the tax “a real blow to innovation, and to the growth prospects of recorded music in France.”
The company said it is “assessing the implications of such a tax” and “strongly remain opposed to this unfair, unjust and disproportionate measure.”
On Wednesday (Dec. 20), Spotify France announced that it was pulling financial support for two local music festivals, the Francofolies de la Rochelle and the Printemps de Bourges, to help offset the extra tax burden.
Plans to tax music streaming platforms’ earnings in France have long been mooted by authorities and were first proposed in April by then-senator Julien Bargeton, who initially suggested a tax rate of 1.75% for services like Spotify, Deezer, Apple Music, Amazon Music and YouTube Music to support the French music industry.
In response, streaming executives and stakeholders from across the country’s music industry put forward a number of alternative funding solutions, including making a voluntary annual contribution of 14 million euros ($15 million) towards The Centre National de la Musique.
Executives closely involved in those talks tell Billboard that the voluntary contribution proposal — which involved the participation of collecting societies and music producers and was tiered depending on a company’s business and turnover — received “near unanimous” backing from across the sector, apart from Amazon, which refused to commit. (Amazon Music, Apple Music and YouTube Music all declined or didn’t respond to requests to comment when contacted by Billboard).
With the music industry unable to agree on an alternative offer, the French Senate voted in November to approve the new tax measures, which were formally ratified earlier this week.
TAX BURDEN
President Emmanuel Macron’s decision to tax music streaming companies to fund cultural programs follows the same principles the country already applies to the film industry. For many decades, the French government has imposed a tax levy on cinema ticket sales (currently amounting to 10.7% of the ticket price) to fund public body The French National Centre of Cinema (CNC).
Since 2010, publishers and distributors of television services, including streaming platforms like Netflix and ad-funded videos platforms such as YouTube, as well as DVD and Blu-Ray retailers, have paid a similar mandatory contribution set at 5.15% of turnover.
Like its cinema counterpart, funding for The Centre National de la Musique will come from across the French music industry, but executives at Spotify and Deezer believe it places an unfair burden on streaming companies who already pay out around 70% of their revenues to rights holders alongside their existing tax commitments in France. They include sales tax (VAT) at 20% and a 3% tax on digital services.
At present, the French live music industry pays a higher rate of tax contribution (3.5% on concert tickets) towards the CNM, but ticketing companies pay a lower rate of VAT sales tax (around 5%) compared to digital music platforms.
Physical music retailers, recording studios, radio services and labels are exempt from paying the new 1.2% levy.
“We’re not questioning the need to finance The Centre National de la Musique or be taxed. What we’re questioning is the decision to only target one distribution format – DSPs,” says one France-based music executive, speaking to Billboard anonymously.
Folgueira says the tax unfairly impacts on European streaming platforms like Deezer and Spotify, which have heavily invested in developing the local market, and disproportionately advantages American tech giants like Google, Apple and Amazon who have a smaller on-the-ground presence and “can easily absorb the costs.”
Paris-based Deezer is the market leading subscription streaming service in France and generates around 60% of its 451 million euros ($478 million) yearly revenue in the country. A tax rate of 1.2% on domestic turnover works out at around 3.2 million euros ($3.5 million), according to Billboard’s calculations.
CUTS COMING?
Folgueira says the new tax burden could possibly mean that Deezer is forced to pass on the extra costs “along the value chain,” which could include reviewing agreements with labels and rights holders.
The CEO says that it’s likely to mean Deezer cutting spend on domestic music projects and marketing, while price rises for subscribers is another possible outcome. “None of which is a good outcome for boosting the French market,” cautions Folgueira.
France is the world’s sixth largest recorded music market with €920 million in revenue in 2022, up 6.4% on the previous year, according to IFPI’s Global Music Report.
Folgueira’s concerns are shared by executives at Spotify. Speaking last week to local news network France Info, Antoine Monin, director general of Spotify France said that the company will reduce its investment in the market as a result of the taxes and said “France will no longer be a priority for Spotify.”
Billboard understands that Spotify France will be making further cost saving announcements in the coming weeks with subscription price rises among the options on the table.
Confirmation of a new tax charge for streaming companies in France comes at a pivotal time for Spotify, which posted an operating profit of 32 million euros ($35 million) in the third quarter of 2023 but has also undergone three rounds of job cuts this year.
Earlier this month, Spotify co-founder and chief executive Daniel Ek announced that the company was to close more than 1,500 posts internationally, representing around 17% of its global workforce.
“For many months now, we have been denouncing the risks underlying the creation of such a tax, particularly in terms of the loss of attractiveness for platform investments in France,” says Alexandre Lasch, managing director of French labels body SNEP. “It is precisely the artists produced in France who will be the victims.”
Despite streaming companies’ opposition to the levy, other sectors of France’s music business have welcomed the increased funding towards domestic culture.
Guilhem Cottet, managing director of the French association of independent music companies UPFI, says the establishment of a mandatory contribution to the CNM from streaming companies will help drive diversity and innovation in the sector.
“The current remuneration model is unjust towards a lot of musical genres which are not heavily listened to by young people — mostly rap and electronica — in France. And if there’s no decent remuneration, labels will cease producing these genres,” says Cottet.
“The tax is a regulation tool to ensure the CNM is able to finance them and make sure diversity prevails.”
While Spotify is planning to start penalizing labels and distributors for egregious instances of streaming fraud, Apple Music quietly rolled out its own strengthened fraud protections — including hitting repeat offenders with “financial adjustments” — more than a year ago, according to an email obtained by Billboard that the platform sent to music industry partners in March. Apple Music’s internal metrics indicate that the policy has already led to a 30% drop in streaming manipulation.
In the March email, the streamer defines manipulation as “the deliberate, artificial creation of plays for royalty, chart, and popularity purposes” as well as “the delivery of deceptive or manipulative content, like an album of 31-second songs.” “In October [2022], we launched new tools and policies designed to prevent stream manipulation on Apple Music,” the email explains. “Since we launched the new tools, manipulated streams have accounted for only 0.3 percent of all streams.”
That 0.3 percent figure is lower than the stats cited by some of Apple Music’s rivals. A Spotify spokesperson told a Swedish newspaper earlier this year that “less than one percent of all streams on Spotify have been determined to be tampered with,” while Deezer has said that it finds 7% of plays to be fraudulent. (This comparison only goes so far, though, because each service might define fraud differently, and not all of them have ad-supported tiers.)
In a statement, an Apple Music spokesperson said the platform “takes stream manipulation very seriously. Apple Music has a team of people dedicated to tracking and investigating any instances where manipulation is suspected. Penalties include cancellation of user accounts, removal of content, termination of distributor agreements, and financial adjustments.”
When Apple Music emailed industry partners in March, the streaming service noted that “despite the low percentage [of fraud], manipulation remains a widespread and persistent problem: That 0.3% of streams came from more than 85,000 albums across hundreds of record labels.”
As a result, the email indicates the company outlined a sharper anti-fraud policy in October 2022, promising to take “remedial actions against content providers with repeated and significant stream manipulation.” This means of incentivizing reform has worked for some — half the distributors that were flagged for fake streaming have reduced manipulation on their content by over 45%, the company said.
To help labels and distributors figure out where fraud is occurring, Apple Music’s email says the platform started sending daily reports detailing “a content provider’s albums with streams held in review.” “After each review,” the email goes on, “we remove manipulated streams and release legitimate plays. At the end of each month, content providers also receive a report with all excluded streams.” (Spotify has now also ramped up the reporting it provides to labels and distributors, according to one executive at a distribution company, “adding a new dimension of seeing repeat offenders.”)
“This all happens before Apple Music pays royalties and tabulates charts,” the email noted. “We block wrongdoers from the primary advantages of stream manipulation and redirect royalties to valid plays of content.”
The last six months have seen a flurry of companies committing publicly to fraud mitigation. More than half a dozen distributors formed “a global task force aimed at eradicating streaming fraud” in June. And when Deezer announced a new partnership with Universal Music Group in September, Michael Nash, UMG’s executive vp and chief digital officer, promised that “fraud and gaming, which serves only to deprive artists their due compensation, will be aggressively addressed.”
