Thankfully, if you’re not signed to a major label, streaming platforms have made it easier than ever to make money from your music. It might take time to receive your first return on investment, but with the right marketing, release strategy, and PR campaign, you will reach your goals. In this chapter, we’ll tell you more about royalties and how Deezer’s payment processes differ from its competitors.
What’s the difference between mechanical royalties, performance royalties, and streams?
The music industry has changed massively over the past few decades. If you want to know how to make money on Deezer, you need to understand how money is paid in the music industry’s current climate. There are two main sources of income available to you from Deezer:
- Royalties from the master rights, generated income from your streams. If you release your music yourself, these are transferred directly to your digital music distributor.
- Revenue from performance rights or mechanical reproduction paid to the lyricist, composer, and publisher of each song via a collection society (these societies are also known as performing rights organizations) — such as SACEM (FR), PRS (UK), BMI (US), ASCAP (US), GEMA (DE), SGAE (ES) or SUISA. This money used to come from the sale of physical recordings, but these days private streams are also included. If you’re not sure what collection agencies are in your country, check out this list of international collection societies.
The business side of the music industry can be a tricky thing to get your head around. How do you know when you are owed money? Take Whitney Houston’s “I Will Always Love You”, for example. Whitney recorded the song with her label, Sony Music, which owns the master rights, which means they receive the royalties for streams of the hit song. Dolly Parton, who was the lyricist and songwriter, gets the public performance and mechanical royalties via her publisher or collection society.
If you do everything yourself, self-releasing and writing your own material, you are the songwriter and label. This means you hold, in the eyes of the law, the master rights and the performance/mechanical rights. Accordingly, you should receive royalties from both sources. If you’re in a band, it’s best to sort out the splits before the release. If you’re releasing your music with a record label, it is likely that they hold the master rights, so they will get the royalties you earn from Deezer, Apple Music, Amazon, Spotify, and any other platform. If you are the composer, lyricist, or songwriter, you will get the performance and mechanical rights from your chosen collection society.
In some countries, platforms such as Deezer must allocate part of their revenues directly to the collecting societies, such as SACEM in France or GEMA in Germany.
What happens to the fees collected by the collecting society? Together with other income from, for example, radio and TV plays, these end up on the account of the respective societies and wait there for collection. Again, this is minus the processing costs incurred by the collecting societies.
Collection societies distinguish between two types of income: Performance fees and fees from mechanical reproduction.
Performance fees are calculated by all the income from the public use of music. This could mean anything from getting your song played on the radio, in a restaurant, or in a bar. Event organizers must also pay fees to the PROs for live performances.
Being a member of a collecting society depends largely on your expected income, and whether it’s worth it for you, personally. In some countries, as a member you have to pay an annual membership fee. If you’re expecting a large number of streams or radio plays; your music video is getting shown on television; or if you have live gigs coming up; being a member of a collection society is well worth researching.
The amount that a composer, lyricist, or music publisher receives per minute and stream varies from country to country. Some collecting societies like STIM in Sweden, for example, offer relatively detailed information about payouts per stream.
No matter which country you come from, you can choose which collecting society you want to become a member of. Be sure to read the respective conditions (especially transfer costs between the societies, membership fees, etc.) and see what suits you best.
Here’s an example: If you’re an American electronic musician who tours in Europe frequently, with regular radio plays on BBC Radio 1, you might want to consider joining BMI or ASCAP to cover the US, and PRS to cover the UK. This will help you get your money faster from those European sales and radio plays.
How does Deezer pay artists?
Like most streaming platforms, Deezer doesn’t pay artists directly for their streams. In the same way that artists must use a distributor to get their music on Spotify, payment is also handled through the distributor.
Deezer transfers the revenue to the music distributors approximately 3-4 months after the music has been streamed. At iMusician, you can withdraw your money any time, directly into your PayPal or bank account, with no minimum payout required.
If you have a Deezer for Creators account, which we highly recommend, you can also follow your streams. A stream counts as such if a track has been listened to for 30 seconds or longer. Everything below this time is not counted.
How much does Deezer pay artists?
At the moment of writing this guide, Deezer, like the other streaming platforms, calculates artist payouts based on the market share model. This means that artists are paid based on their percentage of streams in relation to the total number of streams across the platform each month. The payout also takes into account the monthly count of total songs streamed on the platform, total listeners on an ad-supported plan, and total paid subscriptions.
Deezer has created this graphic to show how market share model payouts work. In this scenario, there are two artists and two members, Ambre and Sasha. Artist 1 gets 90 plays (which come from Ambre) and artist 2 gets 10 plays (which come from Sasha). Although each member pays the same amount in subscription fees, what they play doesn’t go directly to the artist. Instead, it gets put into a pool and then split by percentage of plays across the platform, minus the Deezer operation costs. That means that only a fraction of Sascha’s fee goes to Artist 2.
Because it’s not based on what the listener plays, this gives bigger artists and genres the advantage over smaller, independent artists and bands. As you can see in the example above, due to the market share model, the plays from fans of these acts don’t directly support the diverse artists and genres they are listening to.
Deezer, however, is now looking to shake things up with a new payout model called the User-Centric Payment System (UCPS). This model pays based on what the listener actually plays and not just the percentage of streams in relation to the total of streams played. Exciting news for independent artists. More about that in the next section.
What is the user-centric payment system for streaming?
As mentioned in the previous section, Deezer wants to move away from the current “market share” payout model to reduce unfair revenue gaps that come from applying old ways of thinking to digital music. To combat these revenue gaps, they are now working on a user-centric payment system (UCPS). This payment model is unique because it pays musicians based on what listeners actually play. The market share payout model pays based on percentage of streams across the entire platform, making it unfair for smaller artists. Because it’s tied directly to streams played, the UCPS model should boost the amount of revenue independent artists and labels receive from their music.
Revisiting the scenario from the last chapter, we see the same two artists and the same two members, Ambre and Sasha. In this scenario, however, you can see that all of the members’ subscription fees go directly to the artists they play. That means that Artist 2 gets all of Sasha’s subscription fee, minus the operating costs from Deezer. And while artist 1 gets less than she did in the Market Share model, it’s a more egalitarian split for the payouts, meaning independent artists should see higher revenues.
At the beginning of 2020, Deezer started testing this payment model in France. After they finish testing, they plan to extend the model across the 180 countries where Deezer is available. Because a new payment model means change for all entities involved (labels, distributors, artists, publishers, etc.), Deezer is working carefully to find a balance that benefits everyone.
Long story short: We think a user-centric payment model will create a more lucrative payout system for diverse local and international artists and genres. The USPS will also allow fans to contribute directly to the artists and musicians they enjoy listening to — great news for fans and artists alike!
Why do you need a distributor to collect your money from Deezer?
As mentioned earlier in this chapter, Deezer doesn’t let artists or labels upload directly to the platform. This helps ensure a certain standard is met so that Deezer can provide its members with high quality content. Because you can’t upload your music directly to the Deezer streaming platform, you also can’t get your money directly from them either. That’s where your digital music distributor comes in.
At iMusician, your releases go through our quality assurance team to guarantee that your music, artwork, audio files, and metadata meet the standards and rules of each streaming and download platform. We also ensure you get your sales — usually 3 to 4 months after the fact. And with iMusician, you can transfer your payouts directly to your bank account or PayPal, regardless of how much you have in earnings.
Should I buy streams on Deezer?
You may find companies online that offer to boost your streams for a fee. Once they take your payment, they will then stream your tracks (usually for just over the 30 second stream limit) via a computer program or robot. The idea is that you’ll earn more and move up through the platform’s algorithm and therefore get more fans. While it may seem promising, it’s 100% illegal.
Just like with any digital streaming platform, you should never pay to boost streams or views. Paying for streams is fraud. If Deezer spots any unusual or random stream activity, they are likely to pause or delete any releases they consider suspicious. Like Spotify, YouTube, and Google Play, Deezer has specialized teams that check for this kind of illegal activity. At the very least, your releases will be taken down. But beware, the consequences could be much worse. If you get caught, not only will you lose all your money from your plays and have the music taken down, you could also spend time in jail.
Of course, playing your album a few times a day won’t cause a problem. If you want to boost your revenue a little, ask your friends and family to play your album as much as they can.
Stay in the loop
Keep up to date on all the latest music business news, tips, tricks, and education. Everything you need to grow your music business straight to your inbox.