IMPALA Responds to Deezer & UMG’s Proposal on a Reformed Streaming Market

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IMPALA responds to Deezer UMG's proposal

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Photo Credit: Lucian Grainge / Universal Music Group

IMPALA responds to Deezer and UMG’s proposal on streaming and points to its own plan to boost diversity and improve revenues for all artists.

Last week, Universal Music Group and Deezer announced their proposal to reform the streaming market through a so-called “artist-centric” model, which seeks to change the way streaming royalties are allocated. Meanwhile, independent music companies organization IMPALA held its annual meeting in Vienna, where maximizing revenue for artists and streaming reform were discussed as critical priorities.

IMPALA has released a letter in response to the UMG/Deezer proposal, urging more clarity on topics such as mechanisms for a boost in royalties to artists who meet certain thresholds and other aspects, many of which have come up within IMPALA’s membership.

Concerns raised include whether the proposal could lead to a two-tier approach impacting the work of independent labels — whom IMPALA notes account for 80% of new releases — and label decisions on which services they choose to do business with.

“The fact that the Deezer proposal has been developed in a vacuum with the market leader instead of the sector generally is also a concern,” writes IMPALA. “Unless other stakeholders agree, IMPALA doesn’t see how it could apply outside of UMG repertoire.”

IMPALA notes that it welcomes discussions around streaming reform and Deezer’s engagement in the fight against streaming fraud, which “plagues the industry and diverts revenues away from artists and creators.” Increasing the value of music while elevating diversity is core to IMPALA’s streaming plan, and the organization notes that it appreciates that Deezer shares similar aims.

“IMPALA welcomes moves to propose reform in the market, and IMPALA’s plan also seeks to achieve elements of differentiation as well as combat streaming manipulation,” comments Mark Kitcatt, Co-Owner and MD of Everlasting Popstock and Chair of IMPALA’s streaming reform group.

“Our plan aims to elevate diversity and make it more commercially attractive, as already discussed with various (streaming) services. Our goal is to realize the untapped potential of the streaming market. IMPALA aims to explore this further with Deezer and, indeed, all digital services.”

“We appreciate Deezer’s commitment to improve the streaming market. It will be interesting to see the modeling and understand if this has been discussed with other stakeholders, as well with regulators,” adds IMPALA’s Executive Chair, Helen Smith.

“The gap between bigger and less streamed artists should be addressed, and our plan sets out a number of different ways to achieve that. If Deezer’s approach were to create a two-tier market that would have a negative impact on our members, that would not be good for diversity.”

Further, IMPALA members have flagged that some of the language used in the press in reaction to Deezer’s proposal is “clearly unfortunate.”

“The sector is concerned in particular with the use of the term ‘independent,’ which has been wrongly used to refer to bad actors trying to game the system,” reads IMPALA’s letter.

“It’s a common thread through the history of recorded music that the great artistic advances and changes have come from, and through, the independent sector,” continues Mark Kitcatt. “I don’t expect Goldman Sachs to know that, but Deezer and UMG certainly do, and we hope that services will join with us to reform the streaming world in a way that increases opportunity and reward for all dedicated music creators and enhances and enriches the experience for fans, rather than just diverting more royalties towards the biggest artists.”

“More debate is needed on this vital question, and we look forward to further discussions to clarify the specifics of the Deezer proposal and its potential impact on the music ecosystem before commenting further,” concludes Helen Smith. “In the meantime, it can only apply to UMG repertoire unless or until other licensors were to agree, and we invite all interested parties to read IMPALA’s plan and let us have their views.”