Digital distribution companies criticize the UMG/Deezer royalty breakthrough

The new royalty attribution method recently deployed by Universal Music Group and streaming music platform Deezer (RAIN coverage HERE) seeks to make royalty calculation more fair. But the change is not universally applauded.

Two digital distribution companies Believe and TuneCore, whose customers are mainly indie musicians, disagree with the changes.

The fulcrum of disagreement is about which groups are helped and hurt by the UMG/Deezer agreement, and lies within the details of the new plan. UMG and Deezer are testing a royalty system which rewards streaming music that has been specifically searched for, and/or is played from a user’s library as opposed to an algorithmic playlist. Put another way, the royalty plan rewards successful music, and removes money from newer and less established music.

A statement from Believe calls the new royalty plan a “reverse Robin Hood” system — taking from the poor and giving to the rich, essentially.

Deezer is a French-based streaming platform available in over 150 countries, serving 16-million monthly users, according to one source.