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A fairer streaming model on the way? - WR #166
Weekly Roundups
June 16, 2023

A fairer streaming model on the way? - WR #166

Welcome to our brand new Weekly Roundup! From the partnership between UMG and SoundCloud that revolutionizes streaming compensation, to captivating developments on Spotify and the world of AI. Let's dive in and stay up-to-date with the latest news!

#1. Universal and SoundCloud Pave the Way Towards Fairer Streaming

Streaming is now accounting for a significant portion of recorded music revenues worldwide, and the recorded music industry is growing year after year. However, the current pro-rata model used by most streaming services treats all streaming traffic equally, leading to dissatisfaction among major music companies; its model being outdated to pretend to give a fair revenue to artists.

Leading the charge for a fairer and more equitable streaming compensation system is Universal Music Group (UMG), the largest music rights holder in the world. UMG is currently in talks with SoundCloud to change the way artists are paid for streaming by the end of the year.

This isn't UMG's first move in actively seeking to improve payments to artists from streaming services. They have previously formed partnerships with TIDAL and Deezer to explore new streaming models. While executives from major record labels are advocating for an "artist-centric" payment model, some streaming services are adopting a "fan-powered" model, where royalties are distributed based on individual subscriber activity. Various alternative models, such as implementing higher-tier subscription levels for super fans or price increases, are being considered to address revenue imbalances.

#2. Spotify Tests "Your Offline Mix"

Have you ever experienced boarding a flight, thinking you could relax and enjoy your favorite songs, only to realize once you're in the air that you forgot to download albums or tracks on Spotify in advance? Well, this may become old history.

Spotify has officially started testing a new feature called "Your Offline Mix," which automatically downloads a selection of recently played songs. This feature has been in development for a couple of years and is now being launched for testing.

Spotify CEO Daniel Ek mentioned the testing of "Your Offline Mix" in a tweet, but he did not provide specific details or a release date for the feature. Based on a screenshot shared by Ek, these playlists can store several hours of music, making them convenient at all times. Of course for now, Spotify does already offer the ability to download playlists for offline playback.

Some users on Twitter have reported seeing the offline mix feature in their Spotify apps, although it's unclear in which regions Spotify is currently conducting the test and whether it will be available to free users.

#3. Spotify Faces a Fine for Privacy Violations in Sweden

Speaking of Spotify, the company is facing trouble. The Swedish privacy protection authority has fined them €5.4 million for allegedly failing to comply with EU regulations that require digital services to provide users with access to their data.

This stems from a complaint filed by Noyb in January 2019, claiming that Spotify violated the EU's General Data Protection Regulation (GDPR) by not providing detailed information about stored data, recipients, and international transfers. The case had been originally filed in Austria and later transferred to the Swedish data protection authority. Now, Spotify has announced its intention to appeal the decision.

Noyb emphasizes the need for authorities to expedite procedures and ensure users' right to access their data, stating that "the case took more than four years and we had to litigate the IMY to get a decision." In response, Spotify maintains that it "offers all users comprehensive information about how personal data is processed"  and disagrees with the decision.

#4.Concord Secures New Agreement with ICE

Concord has recently announced a new multi year agreement with the International Copyright Enterprise (ICE), leading to a significant increase in royalties for Concord since joining as an ICE Core direct member in 2018. With a portfolio of over 800,000 owned or administered copyrights, Concord has witnessed an impressive average year-on-year rise of more than 34% in royalties over the past three years.

ICE, a collaborative effort between PRS, STIM, and GEMA, represents a substantial network of more than 330,000 rights holders and maintains a vast database of 49 million works.

Jim Selby, Concord's chief publishing officer, expressed great satisfaction with the partnership with ICE, stating, "It's a genuinely customer-centric partnership that we enjoy with everyone at ICE, and that extends well beyond doing the initial deal. Backing up deep market understanding with systems that efficiently and effectively deliver actual royalties enables us to in turn deliver more to our writers."

#5. Will Grimes Make the Best out of AI?

Grimes has taken a pragmatic approach towards the proliferation of AI, embracing it rather than trying to impede its progress. She suggested that platforms like Spotify should have a dedicated section for AI-generated music in order to categorize and understand this unique genre. Of course, she emphasized the importance of obtaining artists' consent and respecting their creative control when using their voices with AI technology.

Grimes has also engaged in another significant collaboration, partnering with music distributor TuneCore for her Elf.Tech project. This initiative enables musicians to create music using a "voiceprint" of Grimes while sharing 50% of the royalties with her. TuneCore's role in the partnership involves reviewing and distributing the music to streaming services, as well as managing royalty payouts. The aim is to establish an innovative and streamlined process that promotes consent, control, and revenue sharing.

Meanwhile, Meta, the parent company of Facebook, has introduced its own AI-powered music generator called MusicGen. Unlike Google's AI music generator, Meta's tool is open source. MusicGen can transform text descriptions into short audio clips, incorporating elements such as melody and style. 

As AI continues to permeate the music industry, the interplay between technology, creativity, and legal considerations remains a topic of ongoing debate. These latest developments showcase both the exciting possibilities and the challenges associated with AI-generated music, inviting further exploration and discussion within the industry.

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