Deezer
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Deezer plans to implement a new streaming model with Universal Music Group later this year — a step that Deezer CEO Jeronimo Folgueira called “the most ambitious change to the economic model since the creation of music streaming and a change that will support the creation of high-quality content in the years to come.”
In an announcement on Wednesday (September 6), Deezer said it would roll out this “artist-centric” system in the French market starting in the fourth quarter of 2023. The new model aims to reward artists and songs that are driving listener engagement while also de-prioritizing white noise and other “functional” audio. “The sound of rain or a washing machine is not as valuable as a song from your favorite artist streamed in HiFi,” Folgueira declared.
As part of the new model, plays racked up by “professional artists” — which Deezer defines as acts with more than 1,000 streams per month spread across 500 unique listeners — with a “double boost.” (The announcement did not define what that “double boost” entails.) Similarly, songs that are driving listener engagement — the metrics for measuring this were also undefined — will receive the same bump.
In addition, Deezer plans to replace “non-artist noise content” — the sounds of whales or washing machines — with its own functional music, while also excluding this audio from the royalty pool so that payouts to raindrop recordings don’t come at the expense of payouts to singer-songwriters. “We are now embracing a necessary change, to better reflect the value of each piece of content and eliminate all wrong incentives,” Folgueira said in a statement. “There is no other industry where all content is valued the same.”
“With this multi-faceted approach, music by artists that attracts and engages fans will receive weighting that better recognizes its value, and the fraud and gaming, which serves only to deprive artists their due compensation, will be aggressively addressed,” added Michael Nash, UMG’s evp and chief digital officer. He also noted that the model may change in the future: “As the ever-evolving music landscape continues its rapid transformation, UMG and Deezer will rigorously address the impact of these changes as we incorporate new insights from data analysis and fine-tune the model, as appropriate.”
UMG’s quest for a new streaming ecosystem has been a major talking point for the company since January. That month, in a letter to staff, UMG chairman/CEO Lucian Grainge called for the development of “a model that will be a win for artists, fans, and labels alike, and, at the same time, also enhances the value proposition of the [streaming] platforms themselves, accelerating subscriber growth, and better monetizing fandom.”
Since then, UMG announced partnerships with both Tidal and Deezer to try to determine what that model might look like. Streamers can do “a better job of monetizing these high integrity, high intense artist-fan relationships,” Nash told financial analysts in March. “We’ve been speaking with platforms… about the enhancement of offers to the consumer that reflect the engagement with artists that are really driving the economic models of the platform.”
Spotify CEO Daniel Ek, however, appeared less enthusiastic about implementing a major change to the streaming model during an earnings call in July. “Most studies we’ve done on this [show] that even if you change it to a user-centric or an artist-centric approach, it seldom leads to these gigantic differences that most people perceive it to do,” he said.
“But we’re always open to hearing how we can make the system [fairer] to more artists,” he added.
Spotify led a group of high-flying streaming stocks this week by gaining 14.8% to $157.54 per share, increasing its market capitalization by nearly $4 billion to $30.7 billion. The world’s largest streaming company, which boasted 220 million subscribers as of June 30, has clawed back nearly all its losses since its share price dropped 14% […]
Beats marketplace BeatStars signed a partnership deal with AI music startup Lemonaide that will make “ethically-sourced AI” available to music creators to help them write and produce new works. Lemonaide’s AI technology “purposefully generates short musical ideas to spark inspiration, push creative boundaries, and pull artists out of their creative slump,” according to a press release. The companies claim the AI is “trained exclusively on voluntarily contributed data from producers” to ensure proper compensation for and active participation by those whose musical works are used.
Music festival and live events promoter Insomniac and music and lifestyle brand Emo Nite announced a partnership that will encompass projects ranging from events to music to apparel. First up is the launch of Grave Rave, a new event series coming to Los Angeles in December that will feature “both legendary and emerging bands and DJs…fusing the sounds of electronic music with the melodies of the emo, pop-punk, and rock genres,” according to a press release. A preview party for the series will be held on August 26 at Insomniac’s Academy LA venue with a surprise lineup of DJs who “built their careers on pop-punk/alternative/emo influences,” the press release adds. The two companies have also teamed for the launch of a new record label, Graveboy Records, with forthcoming single releases by We The Kings, Say Anything and Noelle Sucks. The first collection of Insomniac x Emo Nite merch will also debut at HARD Summer 2023.
Atlanta-based record label and management company Love Renaissance (LVRN) will utilize music streaming and discovery platform Audiomack‘s proprietary ArtistRank system to discover and develop emerging musicians under a new partnership. According to a press release, ArtistRank “allows partners to identify better when an artist is building a lasting fanbase, differentiating itself from other analytical tools by emphasizing engagement metrics rather than solely through play growth.” It provides detailed analytics on fan demographics as well as predictive data that analyzes an artist’s potential growth trajectory.
NetEase Cloud Music formed a partnership with leading Chinese music and entertainment company RYCE Entertainment that will see the companies extend their previous agreement while also giving NetEase access to an expanded portfolio of RYCE’s music catalog in China, with 30-day initial launch rights to distribute new additions to the catalog. The companies will additionally team up to promote RYCE artists and music in China. RYCE’s catalog includes works by Jackson Wang, Amber Liu and Tablo, among many others.
NLess Entertainment co-founders Zach “Z-Bo” Randolph (a former NBA star) and Marcus “Head” Howell are leading a funding found for Connect Music Group, a Black-owned Memphis music company that offers tools and resources to help independent musicians build successful careers while retaining ownership of their masters. Along with fellow investor Richard W. Smith, CEO of airline and international at FedEx, Howell recently hosted an investor event to raise capital for Connect. The amount of the funding round is unknown.
MNRK partnered with New York industry workshop Steel Sessions — based in downtown recording studio The Engine Room — along with its producers Francis “Buda Da Future” Ubiera, Dan “Grandz Muzik” Garcia and Michael “Mike Kuz” Kuzoian. Under the deal, Ubiera, Garcia and Kuzoian will develop artists in the studio to eventually sign them to MNRK while also providing production services for MNRK Urban’s frontline releases, lo-fi instrumental albums, brand partnerships, soundtracks and artist synchs.
Deezer renewed its partnership with French telecoms provider Orange which was first struck in 2010. Under the deal, Orange customers will continue to have access to the Deezer streaming service. In celebration of the renewal, Deezer and Orange will offer six months of Deezer Premium for free to new customers who subscribe to a “Plus que forfait” plan.
Don McLennon, formerly of Brockhampton, has partnered with Nashville-based music tech company Artiphon to release his new track, “Halcyon,” exclusively via the company’s handheld smart instruments, Orba 2 and Chorda. Utilizing stems, Artiphon and McLennon will offer fans the ability to remix the track without any prior musical skill.
Shares of SiriusXM soared 49.1% this week due to a “short squeeze” related to a trading strategy involving its parent company, Liberty Media. The stock rose 49.1% to $7.08, turning an 18.7% year-to-date loss into a 21.2% year-to-date gain.
On Thursday (July 22), SiriusXM shares increased 42.3% as 128 million shares were traded — about 6.7 times the average daily trading volume. The price fell 9.3% on Friday to close at $7.08 as trading volume reached 132.9 million shares.
As an article at Barron’s explained, SiriusXM, a heavily shorted stock, has benefitted from investors taking a long position in Liberty SiriusXM Group — a tracking that includes SiriusXM — and a short position in SiriusXM. (A short position is a bet that a stock price will decline. A long position is a bet the stock price will increase.) Those positions would benefit if Liberty SiriusXM Group, viewed as an inexpensive alternative to SiriusXM, was able to narrow the gap to SiriusXM. But SiriusXM shares have risen in recent months, turning the short into a losing bet.
Investors who short a stock must buy back borrowed shares to cover their short position. When a stock has a small public float — as SiriusXM does — demand for a limited number of available shares can drive up the price. This isn’t happening just with SiriusXM: Heavily shorted stocks helped the stock market rally in the first half of the year. “As expected, shorts are getting squeezed in these losing trades and we are seeing short covering in these stocks — helping drive stock prices even higher alongside the momentum long buying we are seeing in these stocks,” Ihor Dusaniwsky, managing director of S3 Partners, told Yahoo Finance last week.
SiriusXM was — by far — the best-performing music stock this week, as the Billboard Global Music Index rose 6.8% to 1,447.32, bringing the year-to-date gain to 23.9%. Eight of the index’s 21 stocks were in negative territory, one was unchanged and 12 stocks posted gains this week.
French music streamer Deezer boasted the week’s second-biggest improvement after gaining 10.3% to 2.58 euros ($2.87). On Thursday, the company announced it had renewed its partnership with telecom company Orange, which will continue to drive customer acquisition in its home market. Under the new partnership, Deezer and Orange will offer new customers six free months of Deezer Premium.
Live music companies also had a good week. Shares of Sphere Entertainment Co. gained another 8.9%. German concert promoter CTS Eventim improved 6.9%. And Live Nation shares rose 2.5% after Oppenheimer initiated coverage of the company with a $110 price target, suggesting the stock has a 14% upside from its $96.84 closing price on Friday.
Shares of Cumulus Media gained 9.7% this week, the leading stock in the Billboard Global Music Index and one of only four stocks in the 21-company index to end in positive territory Friday (June 23).
Overall, the Billboard Global Music Index declined 3.5% to 1,287.41 — more than double the 1.4% declines of the S&P 500 and Nasdaq. Music stocks were more in line with the Nasdaq when the overpowering effects of a small number of tech companies are removed, however. That’s because a few powerhouses — such as Microsoft, Apple, Alphabet and Amazon — often account for a large fraction of the Nasdaq’s gains. To that point, QQQE, an exchange-traded fund that gives equal weight to 100 Nasdaq stocks, declined 2.9% this week.
In the United Kingdom, the FTSE 100 declined 2.4%. South Korea’s KOSPI index fell 2.1%. Central banks in England, Turkey and Norway raised interest rates this week. Investors can reasonably expect more rates hikes in the United States, too. Federal Reserve chairman Jerome Powell said on Wednesday the central bank may continue to raise rates — there have been 10 since March 2022 — but “to do so at a more moderate pace.” When central banks raise interest rates, stocks tend to fall because businesses and consumers are expected to cut back on spending and higher rates make bonds relatively more attractive to stock returns.
Cumulus Media improved to $3.40 a week and a half after the company announced it will sell about 1.75 million Class A common shares — nearly 10% of outstanding shares — at $3.25 per share in a modified Dutch auction that closed on June 9. While the sale will gross about $5.7 million, not including fees and expenses, the final result was well below the company’s goal to sell up to $10 million of shares as part of a previously announced $50 million share repurchase plan.
Shares of French music streaming company Deezer gained 3.6% to 2.32 euros ($2.54), bringing the stock’s year-to-date loss to 20.5%. U.S. streaming company LiveOne gained 3.3% to $1.58. Year-to-date, LiveOne has gained 145.3%. The only other company with a week-over-week improvement was South Korea’s HYBE, which improved 1.2% to 301,000 KRW ($236.91).
The other three Korean music companies declined this week: SM Entertainment and YG Entertainment each fell 5.6% and JYP Entertainment dropped 3.5%. Still, K-pop has been a resounding success for investors in 2023. Led by JYP Entertainment’s 93.7% year-to-date gain, the four Korean companies’ stocks have risen an average of TK% in 2023.
One company, Anghami, was unchanged and the index’s other 16 stocks were in negative territory this week. MSG Entertainment had the Billboard Global Music Index’s largest decline after dropping 17.1%. Sphere Entertainment Co., which spun off MSG Entertainment in April, intends to sell part of its 33% stake in MSG Entertainment. The news dropped the live entertainment company’s share price 12.1% on Wednesday. At Friday’s closing price, Sphere Entertainment’s sale of 5.25 million shares would gross about $170 million that could help fund the state-of-the-art Sphere at The Venetian Resort in Las Vegas that’s set to open in September.
French streaming service Deezer and Universal Music Group announced this month that they are partnering to develop and test new potential payment models that would more fairly reward artists, similar to a partnership UMG launched in January with Tidal.
While the streaming services and labels are still a long way off from implementing new streaming royalty payment models, Deezer’s chief executive Jeronimo Folgueira spoke with Billboard about some of the ideas being explored and the economic imperatives that are driving his company to push for a new way to pay rights holders.
Deezer has long advocated for changing payment systems. How have the company’s views evolved?
We were, I believe, the first to really embrace the concept of user-centric, which means that the artist gets a share of the payments that the user that listens to them pays, instead of a global pool. We could never do it unilaterally [because] we have not been able to get the majority of labels to agree to an initiative so far. To do it right, you really need a consensus from the industry and obviously, there are so many players involved that it’s difficult to get that. I do believe [an artist-centric] system is much better than the current system we have, but no system is absolutely perfect. There were some flaws, and that’s why there was so far resistance from some labels. I believe that there are a lot of elements in the artist-centric initiative that Universal is pursuing that make sense and could make something like [user-centric payment systems] even better.
You often mention the importance of “growing the pie.” What do you mean?
When the discussion is about sharing the same pie there are always winners and losers and it’s very difficult to get consensus. That’s why if you focus on growing the pie then you can have a discussion also about the distribution of that pie because some will win and some will win double. One of the things that I’m really excited about in this discussion is … also figuring out ways of monetizing fandom better. If we can find ways to increase the [average revenue per user] on the way, that would be a win for the artist, for the labels and for the platforms like us.
How does that fit into Deezer’s overall growth strategy?
Basically, today 100% of our revenues come from selling access to the catalog. So you pay $10.99 and you get access to the full catalog. But we don’t let users pay for anything else on the platform. We know that we have a lot of fans of artists on Deezer but we cannot monetize them in any other way. And the artist is struggling to monetize them in other ways because they don’t have direct access to the fans. We believe that working together with the label and the artists to figure out ways of helping the artist directly access their fanbase and monetize that fandom would benefit us and them as well.
What’s in it for you?
If we only change the compensation model there is nothing in it for Deezer except that we will be a platform where artists are remunerated better. It will give us a bit of differentiation but economically it will not really change anything.
If we find ways of monetizing better, let’s say, if we would allow fans to subscribe directly to artists, we would have an additional revenue source that we would share with labels and the artists, which will improve our growth and profitability profile. It is important to be more fair in terms of payout but to have a financial impact, we also care a lot about growing the pie. I fully share [Warner Music Group CEO Robert Kyncl‘s] view. Music is extremely undervalued. We are very keen on working with Universal, but we are also keen on working with all the other labels like Warner, Sony, Believe and all the indies to make the industry better by monetizing better and then sharing that pie in more fair ways.
Do you have to “grow the pie” in order to pay artists more?
There’s not enough money right now for us all. First of all, music is undervalued. We’re giving too much for too little. Second, with the current monetization model, there is really not enough money for everyone. The platforms like Deezer or Spotify, we’re not making enough profits. And many artists are struggling to make a living. So for the system to be viable we need to grow the pie. That has to be the number one focus.
At the risk of asking a naïve question, what if the share of the pie that has historically gone to the labels shrank? Is that just impossible?
So basically the artists get more, and the DSPs get more and the labels get less? The thing is that it is a fragile ecosystem with a lot of negotiation power in the hands of the labels. You [the DSPs] do need a full catalog. The labels are not going to hand their money to us or to the artists. Instead of having that fight — which is what we’ve been doing basically for the last 10 years — it is a far healthier discussion to be had working together to grow the pie especially because music now is extremely undervalued. The piracy days are long gone. This is the right time to have the discussion. One of the things that doesn’t help is that a lot of the distribution is in the hands of companies that don’t have music as a core business.
Who are you referring to?
I’m talking to the tech giants. Three key players here are tech giants, and their core business is not really music. Then you have two independents, one that is very big — Spotify — and then Deezer. We are truly music; it is our duty and necessity to work together with the labels to make the whole ecosystem better and bring the value of the music to where it should be.
Where does the initiative with UMG currently stand?
There is nothing that we are testing yet, and we don’t have a deadline. But we are starting to work on different models of compensation that we could eventually test that would solve a lot of the issues we see today.
During a recent earnings call, Universal Music Group chairman and CEO Lucian Grainge said he wanted a new model where “artists are rewarded for the fans they bring in [to subscribe to streaming services] and the engagement they drive [on those platforms].” How can you determine which artists drive subscriptions?
That is very difficult to know and quantify. This is one of the areas where we are working with Universal to figure out if there is a way to measure, quantify it and use it for payment or not. That’s part of the exercise. That is one of the most tricky ones. There are other areas [such as] if a user goes and searches for an artist and song, that has more value than if they just go and listen to that stream in a lean-back experience. A stream that is heard as part of a playlist is not as valuable as when you go proactively to a platform, look for a song and play that song. You as a fan care about that song more. We agree with that as a concept but the question is how do you apply that in a model that is easy to implement and explain? There needs to be transparency [so] everyone understands how things get calculated and how people get remunerated. It’s easier said than done. This is why we need to work with Universal but also with other labels to do that exercise. First, we have to agree with the principles. And then you have to find a pragmatic way of actually doing it.
Could you walk me through the different models you are exploring?
I cannot go into that level of detail right now because we are in a very exploratory phrase. We are looking at what is feasible, what impact does it have and, based on that, we will have a proposal to test. But it’s too early to explain these models.
Have you seen any examples of streaming services that have done a good job of encouraging active fan experience?
Video and music are very different so you cannot really draw comparisons between the two. I don’t think anybody has cracked it, and that’s why Universal is working with us. We would love to be the first ones to figure out the new model that makes sense. SoundCloud made an announcement with Warner Music around user-centric, but they haven’t disclosed anything. Since they are a private company, we do not know how that has worked or played out.
Where are the majority of Deezer’s users based? Could the results of the Deezer and UMG experiment be applied on a global scale, or would differences in listening behavior in different markets limit the wider applicability of the study?
We are a global company with a presence in 180 countries. We have a large user base in France — less than half of our subscribers — then we have a lot of subscribers … in Brazil and then a bit everywhere else. Our model will have a big impact on the French market because there we are a massive player, but the learnings can be applicable anywhere in the world.
However, Lucian has mentioned that he sees different models for different platforms at different stages of their development in different countries. I think there is some merit in that. Our Brazilian business is very different from our French business and American business. You might need different models as you go through different stages in a market. Right now, it’s one model that came up really quickly, built 15 years ago on the back of piracy, and that model fits all. I think in the future we need more flexibility.
Is there anything I didn’t ask that you wanted to highlight?
Something that is really important is that we are working really closely with UMG because they are the largest label in the world. And they are a very important player and you cannot change the system without having Universal on board. I’m really excited that Lucian is leading this discussion and trying to make the industry better for everyone.
But I want to make sure it is well understood, as well, that this should benefit all real artists, whether they are from Universal, any other label or independent. We want to reward real artists that create real music. This is not to benefit Universal alone in any way. This is not a Universal-centric payments system. We’re working together to make the industry better for everyone who creates high-quality content.
You said a better system will reward “real artists” and “high-quality content.” What is the opposite of that? And should it not be rewarded in this new system?
There is a whole discussion on what are we going to do when machine-generated music comes because it is going to happen. There is not that much yet, but I think it’s a matter of months before we start getting flooded by machine-generated content, and we need to think about how we’re going to handle it. The other thing is it’s not the same that an artist creates new music and creates a fan — is a real artist in a way — compared to, for example, people that do a cover…. Those streams are not as valuable to us as the original song from the original band. The same thing with sounds that get uploaded, for example, the sound of the washing machine for people who need that to sleep. The sound of rain is not as valuable as a proper album created by an artist recorded in a studio. The fact that the recording of rain gets more streams than Lady Gaga, I find that astounding. We have to do something about it. It is hurting the user experience. We cannot flood the catalog with poor-quality stuff.
What should be done, and is this part of artist-centric royalties or another initiative?
We are trying to address that problem as part of the artist-centric discussion. We believe there are things we can do with the artist-centric model that will create the right incentives and will solve part of that problem. Yes, there are other areas where we might be stricter about the rules of what can be uploaded to the platform or not. We will explore all the different options. Obviously taking a big part of the economic incentive [away] is a big part of the job.
Universal Music Group CEO Lucian Grainge announced that the company had entered into a new partnership with Deezer during an earnings call on Thursday (Mar. 2nd). The goal? To help develop a “new model” that “ensure[s] continued growth of streaming” while also valuing “the contribution of both artists and fans alike.” UMG previously touted a similar partnership with TIDAL in January.
The need for a “new model” — also highlighted in Grainge’s letter to staff from January — was a recurring theme of Thursday’s call. “Streaming has evolved in a way that undervalues the critical contributions of many an artist as well as the engagement of many fans,” Grainge said. This unfortunately flouts “the basic unarguable truth that is: The artists are the center of everything in the music ecosystem,” he added.
UMG executives offered scant details about what this new model would look like, even when asked directly about the topic, saying it was too early to tell. One key element for Grainge appears to be that “artists are rewarded for the fans they bring in [to subscribe to streaming services] and the engagement they drive [on those platforms].” In addition, he hoped that fans would be “offered more ways to engage.”
These sentiments were echoed by Michael Nash, UMG’s executive vp and chief digital officer. Streaming platforms can do “a better job of monetizing these high integrity, high intense artist-fan relationships,” he said. “That will come with superfan monetization. We’ve been speaking with platforms…about the enhancement of offers to the consumer that reflect the engagement with artists that are really driving the economic models of the platform.”
UMG executives also praised the streaming services that have raised their prices recently, mentioning Apple and Amazon by name (twice). “Fans recognize the enormous value offered by music subscriptions, still a relatively low cost, high-value form of entertainment, which in turn has supported decisions made by a number of our DSP partners to raise prices recently,” Grainge said.
But not all streaming services have gone this route. Grainge added, pointedly, that “ensuring the artists’ work is properly valued should be a critical goal for everyone who wants to keep the industry growing.”
In addition to discussing the future of streaming, UMG executives spent a notable portion of the conference call explaining to analysts, in defensive tones, their place in a highly competitive catalog acquisition landscape and the strategy they use to evaluate potential purchases. Grainge said UMG sees “almost everything” in the music rights investment space that goes up for sale and passes on “most of it” because it does not meet the company’s standards for returns.
He also asserted that many competitors in the catalog acquisition space are “passive participants who do nothing and therefore cannot exploit the full potential” of the rights they own. “There are many who claim they actively manage rights, but they do not,” Grainge said. “Why? Their lack of infrastructure, their lack of experience and expertise and even more critical, in many cases, their inability to acquire all of the rights necessary to actively manage anything.”
Acquisitions “are an important, although relatively small proportion of our total business today,” UMG’s CFO Boyd Muir added during his remarks. “But we will continue to be opportunistic, to add to a roster of iconic artists, in a financially disciplined way.”
French music streaming company Deezer reported on Tuesday that its 2022 revenues rose 13% to 451 million euros ($478 million), as the company reduced its losses by 18 million euros ($19.1 million) through a combination of growth through partnerships and eliminating marketing spend.
The company reported its adjusted gross profit rose 16% to 98 million ($104 million) euros in 2022 versus 2021 on greater margin improvement. The 18 million euros ($19.1 million) the company reported in savings came partly from growth — Deezer grew its top line by 51 million euros ($54 million) and improved gross margins by 30 million euros ($32 million) — and partly from reducing its marketing spends in certain emerging markets.
For years since its 2007 launch, the Paris-based company angled to gain customers by partnering with telecommunications companies. But under new chief executive Jeronimo Folgueira, Deezer has focused on a business-to-business (B2B) approach, aiming to gain more streaming users in major markets through partnerships with companies that already have established customer bases.
That piggy back approach — which is already in place with Sonos in the United States, RTL in Germany and DAZN in Italy — allows Deezer to reach prospective customers in major markets without investing to build a brand first. Folgueira, who joined Deezer in June 2021, says 2022’s earnings show the strategy has legs, and he expects his company to generate revenue growth of more than 10% in 2023 as they work toward achieving profitability by 2025.
“All of the ground work on B2B that we’ve been doing is starting to pay off,” Folgueira tells Billboard. “Those deals are just the beginning. We want to enter markets through partners, and we are targeting the United Kingdom and other major European markets like Spain.”
Last year, Deezer partnered with German broadcast giant RTL Deutschland to deliver music and video content over the app RTL+ Musik, putting Deezer in a position to compete in the crowded streaming space in the world’s fourth-biggest recorded-music market, and it teamed up with the Italian sport subscription streaming platform DZAN.
This year, Deezer struck a long-term agreement with the U.S. speaker and hardware company Sonos to power its Sonos Radio and subscription service Sonos Radio HD, a deal that will extend Deezer’s reach to 16 countries, including the United States, Canada, the United Kingdom, France and Germany.
Deezer remains strongest in France, where it is bundled with telecom company Orange and has 4.4 million subscribers, and in Brazil, where it partnered with TIM Celular in 2016 and has 2.7 million subscribers, according to company filings. Worldwide, Deezer has 9.4 million subscribers compared with Spotify’s 195 million subscribers and 273 million free (ad-supported) users, while TME has 82.7 million paying subscribers, according to the companies’ latest earnings reports.
The company was among the first DSPs to raise prices last year when it upped the price for an individual plan to 10.99 euros ($11.66) per month from 9.99 euros ($10.60) and family plans to 17.99 euros ($19.09) per month from 14.99 ($15.91).
Those hikes helped deliver a 14.3% increase in the company’s average revenue per user (ARPU) in 2022. Deezer had 9.4 million subscribers as of Dec. 31, 2022, down 2.2% from a year earlier.
“On the year as a whole, there was basically no impact on churn despite a roughly 10% price increase,” Folgueira says. “People are willing to pay more for proper quality music.”
Multimedia Music acquired the music publishing and music master rights for the entire film music library of STX Entertainment, which encompasses titles such as Bad Moms, The Gentlemen and Den of Thieves and music from composers such as Hans Zimmer, Cliff Martinez and Nicholas Britell. The eight-figure deal does not include rights in any of STX’s current or future films.
Deezer struck a long-term partnership with Sonos to power Sonos Radio and the subscription service Sonos Radio HD. Starting in April, Deezer will provide Sonos with a catalog of 90 million tracks, metadata, licensing, reporting & royalty management, business intelligence & data and strategic collaboration for growth and monetization of the service. Deezer and Sonos will deliver services to 16 countries, including the United States, Canada, the United Kingdom, France and Germany.
Yusuf/Cat Stevens signed to Dark Horse Records, which will release the singer-songwriter’s forthcoming album as well as seven legacy albums from his catalog, which are owned by Yusuf’s Cat-O-Log Records. Dark Horse’s merchandising arm, DH Merchandise, will operate the official Yusuf/Cat Stevens store.
ClicknClear, a music tech company that provides access to officially licensed music for performance sports and fitness, signed a multi-year agreement with the National Federation of State High School Associations (NFHS), a leading sports organization in the United States. The NFHS promotes amateur sports participation throughout all 50 states and Washington, D.C., serving 19,500 high schools and an estimated 12 million young people across the country. It also administers high school athletics and activities and establishes regulations for the sanctioning of events. Through the deal, ClicknClear will license the catalogs of its more than 800 label and publisher partners to NFHS’s performance sports participants, with the NFHS also using ClicknClear’s license verifications system to enforce that licensing. Performance sports include cheerleading, dance, gymnastics, figure skating, marching band and show choir. ClicknClear’s music catalog currently includes 5 million tracks and more than 15 million publishing rights from Sony Music, Warner Music, Universal Music Publishing Group, BMG, Kobalt, Concord and Downtown, among many others.
Cutting Edge Media Music (CEMM) secured $100 million in new financing from a consortium of banks led by Pinnacle Financial Partners. CEMM — a financing and investment company with expertise in music for film, TV, video games and more — is supported by other businesses under its parent company, the Cutting Edge Group (CEG), including Cutting Edge Music Publishing, Lakeshore Records, Broadway Records, Music.Film and White Stork. “I look forward to our partnership with Pinnacle to help give the next wave of film and TV composers the opportunity to monetize their catalogues,” said Cutting Edge Group founder/CEO Philip Moross in a statement. CEG’s head of mergers and acquisitions, Tim Hegarty, represented Cutting Edge in the deal.
Triller acquired Julius, a software solution for influencer marketing. “We are delighted to integrate the industry-leading technology from Julius into Triller’s Creator Platform,” said Triller CEO Mahi de Silva in a statement, adding that with the acquisition, “Our unique AI-powered platform now delivers an end-to-end solution for the creator economy from brand storytelling to driving e-commerce.”
Music credits database Jaxsta executed a heads of agreement (a.k.a. letter of intent) to acquire Vampr, a music industry social networking platform. The acquisition increases Jaxsta’s footprint in the creator community by 1.3 million creators. According to a press release, Vampr’s freemium business model successfully converts 4% of the app’s weekly active users into paying subscribers — a number that’s expected to increase when Vampr Pro is bundled with the Jaxsta Creator subscription. Vampr founder/CEO Josh Simons will join Jaxsta as chief strategy officer.
GreenCity Partners and ASM Global struck a deal to develop and operate the proposed 17,000-seat GreenCity Arena in Henrico County, Va., which is part of a planned $2.3 billion mixed-use/net-zero energy GreenCity development. The agreement allows ASM Global to partner in other aspects of the development, including its main street retail and hospitality uses. Construction is slated to begin in early 2024, with completion expected in 2026.
In more ASM Global news, the company struck a long-term lease agreement and $40 million renovation plan with the City of Glendale, Ariz., for the Desert Diamond Arena as part of a strategy to increase the venue’s returns and prominence as a key component in the city’s growth as an entertainment hub. ASM Global has operated the city-owned venue for the past six-and-a-half years. The firm HOK has been selected to help with the venue’s renovation and design.
ASM Global also signed with the city of Fishers, Ind., to provide pre-opening services and professional management for the city’s new $170 million sports and entertainment center, which is set to open in Dec. 2024. In addition to hosting concerts and other events, the forthcoming 7,500-seat venue will be home to the East Coast Hockey League’s Indy Fuel. Expected to break ground in March, the venue is part of the city’s $1.1 billion in economic and entertainment investments announced in September.
Los Angeles-based rock duo Loveless signed with BMG worldwide. The duo, which released their debut self-produced EP, End of an Era, last year, is slated to embark on a headline tour this spring in North America and Europe, in addition to festival dates.
Amazon Music is the new title sponsor of The Ivors, under a global deal that will see the company showcase the Ivors’ commitment to supporting songwriters via exclusive content offerings and live performances as well as an “immersive” red carpet and backstage interviews that will be livestreamed on the Amazon Music UK Twitch channel for the 2023 ceremony. Additionally, the company will integrate the Ivors’ 2023 “Rising Star” nominees into its global developing artist program, Breakthrough.
Micro-licensing and music solutions company Lickd struck a deal with EMPIRE and Kobalt Music Group to license their music catalogs to Lickd’s Chorus music player for use in the metaverse world of Decentraland’s Vegas City.
SESAC Digital Licensing and Wise Music Australia partnered on an exclusive digital licensing deal for the Wise Music catalog in Asia (excluding Japan, South Korea and China) for rights including performance, mechanicals, grand rights, hire materials and synchronization. SESAC Digital will negotiate agreements with online service providers on behalf of Wise Music in Bangladesh, Bhutan, Brunei, Cambodia, Hong Kong, India, Indonesia, Laos, Macau, Malaysia, Mongolia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Timor Leste and Vietnam. The partnership will be administered by Mint Digital Services, an alliance between SESAC-US and Swiss authors’ rights society SUISA.
Singer-songwriter Susan Tedeschi signed with Brian Greenbaum at CAA. The signing coincides with the 25th-anniversary reissue of Tedeschi’s 1998 album, Just Won’t Burn. Tedeschi and her husband, musician Derek Truck, are with Full Stop Management for their solo work.
Memphis-based music credit and information services provider Sound Credit partnered with PPL for neighboring rights collections in North America. Via its sister brand Soundways, Sound Credit’s North American artist community will now be able to take advantage of PPL’s international collections service.
Live Nation will serve as the exclusive promoter for BECU Live and the Pepsi Outdoor Summer Concert series under a new deal with Northern Quest Resort & Casino and the Kalispel Tribe of Indians in Washington state.
Grammy-nominated songwriter and artist Delacey signed to Photo Finish Records, which released her new single, “Man on the Moon,” on Friday (Feb. 17).
Underoath signed to MNRK Heavy on a global basis. The label released the rock band’s latest single, “Let Go,” on Feb. 15.
Virgin Music UK reached a sales and distribution deal with Liverpool-based independent label Modern Sky UK (Jamie Webster, Leah Weller, Red Rum Club).
Pop duo Crash Adams signed to Warner Music Canada/Warner Records, which released their latest single, “California Girl.”
British DJ/producer Riton signed with Atlantic Records/Big Beat, which released his first-ever solo single, “Sugar,” on Friday (Feb. 17).
Sony Classical signed organist Anna Lapwood and will release a five-track EP of film transcriptions in April, with an album to come later in the year.
Tuned Global singed a deal with Lululemon Studio to provide their B2B white-label playlist app for Lululemon’s in-person and virtual workouts.
Chicago trio Lifeguard signed with Matador Records. New music from the band — which previously released an album and two EPs — is expected in the spring.
More than 1 billion music streams in France — or between 1% and 3% of all streams in the country — were detected to be fraudulent in 2021, according to a report released this week by a French government organization that analyzed data from Spotify, Deezer and Qobuz.
If the report’s number were to hold true for the worldwide music market — which the IFPI valued at $16.9 billion in 2021 — that would mean approximately $170 million to $510 million of streaming royalties are being misallocated globally. This is roughly in line with a 2019 estimate of $300 million lost to streaming fraud cited during Indie Week.
The Centre national de la musique (CNM), an organization created by the French government in 2020 that operates under the Ministry of Culture, found that fraud is widespread in France, the fifth-largest music market, to a sobering degree: “Irregularities are spotted” on both major-label and independent releases, national and international albums, old catalog and fresh new singles alike, the CMN says in its 56-page study. “The methods used by fraudsters are constantly evolving and improving,” it notes, “and fraud seems to be getting easier and easier to commit.”
The genres which had the highest percentage of fraudulent streams detected in the CNM’s report were background music (4.8% on Deezer) and non-musical titles (3.5%). While the raw number of fraudulent streams detected was highest in rap — the most popular genre in France — that represented just 0.4% of overall plays in the genre on Spotify and 0.7% on Deezer.
CNM’s report appears to be the first country-wide investigation of streaming fraud. “We’re happy with the effort by the CNM and the French government as a whole to look into this and take it seriously,” says Morgan Hayduk, founder and co-CEO of Beatdapp, a Canadian company that provides fraud detection software to streaming services, labels, and distributors. “This issue deserves the weight and attention that they gave to it.”
CNM’s report comes with several caveats, however. The organization’s data does not include information from Apple Music, YouTube and Amazon, who declined to share information about fraud on their platforms. According to a recent estimate from MIDiA Research, those three services account for slightly more than 35% of global streaming subscriptions. (MIDiA did not share country-level figures.)
In addition, Hayduk says, the report only looks at country-level data. This means it does not account for VPN usage that allows fraudsters to mask their country of origin.
Bad actors committing streaming fraud often “rotate through multiple countries redirecting traffic constantly,” says Andrew Batey, Beatdapp’s other co-CEO. “It’s not uncommon when we find fraud cases to see 15 devices spreading plays across 30 countries.” To catch that, he says, “you need a global view.”
Fraudulent streams, once defined by former Napster executive Angel Gambino as “anything which isn’t fans listening to music they love,” have become a major topic of music industry concern in Germany, France and Brazil. That’s because undetected fraudulent streams can impact market share calculations and divert money from honest artists.
The countries have taken different approaches to combat this fraud. The IFPI led a legal effort to shut down German websites that offered streams for cash starting in 2020. The organization made the case that manipulating play counts allows artists to create a false impression of popularity, ultimately misleading consumers and violating Germany’s Unfair Competition act.
In Brazil, law enforcement worked in conjunction with Pro-Música, IFPI’s Brazilian affiliate, to shut down 84 stream-boosting sites in the country in 2021. Prosecutors there argued that sites that offered fraudulent streams were violating Brazil’s Consumer Defense Code and treated the activity as a criminal act.
Brazil’s coordinated effort — dubbed Operation Anti-Doping — determined that the fraudulent streams were actually being generated outside of Brazil, illustrating the limitations of a single-country approach to fraud reduction. “No company in Brazil has the technology to make these fake streams,” Paulo Rosa, Pro-Música’s president, told Billboard in 2021. “This technology comes from websites hosted in Russia.”
The U.S. industry has historically appeared less bothered by streaming fraud — or at least less willing to acknowledge its existence publicly, with executives and streaming services reluctant to discuss the subject. This may be starting to shift, however. At a Music Biz panel in May, SoundCloud vp of strategy Michael Pelczynski noted that the current streaming ecosystem is rife with “very prevalent fraud and abuse,” and that this activity has “cultural ramifications.” When undetected fraudulent streams “start influencing the way we measure the success of music, we are literally supporting inauthenticity,” Pelczynski said.
The CNM appeared heartened by the fact that, since the summer of 2021, it has seen “the growing mobilization of platforms, distributors and producers” worried about fraud, resulting in the creation of “dedicated teams” and the outlay of increased resources to battle “manipulation.”
But there remain several key challenges when attempting to tackle fraud. The lack of transparency from some streaming platforms, and the inability to push toward assembling a comprehensive global data set, means that the scale of the problem is still unknown.
What’s more, as the CNM points out, it’s nearly impossible to punish those engaged in fraud because they are rarely identified. The penultimate section of the report lays out potential legal remedies that could be used to fight fake streams in France — if authorities were able to prove that bad actors violated laws related to illegal hacking or unfair business practices. They include fines of up to 300,000 euros ($324,000) and prison sentences of up to five years for perpetrators.
The CNM pledged to release a follow-up report in 2024.