| Last month, Universal Music Group CEO Lucian Grainge emailed his staff with an ambition he and his team would focus on in 2023: changing streaming. "[W]e need an updated model," he wrote. "Not one that pits artists of one genre against artists of another or major label artists against indie or DIY artists. We need a model that supports all artists—DIY, indie and major. An innovative, 'artist-centric' model that values all subscribers and rewards the music they love." People game the system, he said, uploading short tracks and buying streams online to make money while other types of "irrelevant" content—he's likely talking about genres like white noise—accumulate many hours of listening and accrue royalties that would have otherwise gone to what he deems worthwhile artists. In the weeks since that memo, UMG has spoken up even more publicly. The Financial Times published a story this week saying the company has begun conversations with streaming platforms about instituting possible changes. Also this week, Tidal and UMG issued a joint press release confirming that they'd begin exploring alternative models. Even Drake, a UMG superstar, bought into the messaging. Last night, he posted an Instagram story with a screenshot showing that he had surpassed 75 billion Spotify streams and is the first artist to do so. "We should get bonuses like athletes to motivate the future artists to be consistent and competitive… so feel free to send me a Lebron-sized cheque I have enough dinner plates," he captioned it. Then, capping off the week, an investor asked Spotify CEO Daniel Ek about Grainge's comments during the company's quarterly earnings call. Ek pointed out that streaming has allowed more artists to find listeners, particularly on the local level, but that even with this democratization, artists still can't necessarily make a living off their work or might just be one-hit wonders. "I think some of these trends are very powerful and very good I think for consumers with more choice and more artists making their way," Ek said. "You need to balance that, obviously, with having the ability to have sustainable artist careers on the back of that, too, and that's a constant dialog that we're having with our label partners. But I would mostly say that most of what we're seeing is quite encouraging because of all the response that we're seeing from artists around the world and their ability to grow their audience." All of which is to say, UMG, at least, is likely going to keep pushing on this issue, and we'll hear more about it in the coming months. I caught up with Mark Mulligan, managing director and analyst at Midia Research, to get a better sense of what we can expect from these sorts of discussions and how we ended up here in the first place. "Everybody is dissatisfied to one degree or another," he said. He pointed out that independent artists and songwriters say they're not compensated enough. The major labels believe their artists are undervalued for the assets they provide, and one of the biggest independent streaming platforms, Spotify, is still bleeding money. You can see some of this play out in data, particularly for the independent artists. Last year, Music Business Worldwide found that nearly 80% of artists on Spotify have a monthly audience on the platform smaller than 50 people. More musicians can get their music out there, but finding an audience and breaking through the noise is also harder than ever. "All constituents have problems with the system," Mulligan said. "It needs to be re-framed." What Mulligan sees as a potential way forward, rather than trying to qualify what counts as valuable music, is to focus on user behavior. For starters, reward artists who listeners actively seek out, as opposed to paying the same royalties when a listener puts on a playlist. The FT reports that UMG is specifically looking at creating a "bonus pool" of money for artists that generate streams from new users, as well as a super fan subscription tier that gives subscribers new perks. Up until now, streaming model innovation mostly came in the form of fan-centric royalties, meaning instead of pooling money to be distributed to artists and rights holders based on their share of the listening pie, an individual subscriber's monthly payment is divided up among their most listened to artists. SoundCloud launched fan-powered royalties in 2021 while Tidal, up until this recent press release, said it'd roll out a similar product for certain subscribers. (In a comment to me, Sade Ayodele, Tidal's global head of communications, said the company never ended up implementing the fan-centric royalty model because it "created a new set of challenges" for artists.) The industry has plenty of ideas, but can the system truly change? Well, Grainge's push is getting a lot of attention in its first month, and we've got a long year ahead. Drake's already on board. So what happens if UMG gets the rest of its lineup, artists like Taylor Swift and The Weeknd, to speak up? I'm watching and waiting. | 
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