As things stand, there are three ways to make meaningful revenues from streaming music:
First, be an artist popular enough to rack up tens of millions (or ideally hundreds of millions) of streams, at which point the micro-per-stream payments add up. Second, be a major label taking hefty advance payments from a service for the rights to stream your catalogue, and/or be a label or manager getting paid for exclusivity on a particular album or artist. And third, get equity in the streaming music service and bide your time until somebody buys it, or it goes public.
This is why there’s a vocal backlash this morning against Tidal, the streaming service recently bought by Jay Z and now owned by a collective of famous musicians: Alicia Keys, Arcade Fire, Beyoncé, Calvin Harris, Coldplay, Daft Punk, Deadmau5, Jack White, Jason Aldean, J Cole, Kanye West, Madonna, Nicki Minaj, Rihanna and Usher – all present for last night’s press conference.
It looks, on the surface, like a rich musicians’ club. They’re the ones who are already generating the most streams on rival services, and they’re the ones who own equity stakes in Tidal. And if the company is going to be paying out advances for exclusivity on new music from other artists, it’ll be musicians of a comparable scale.
Hence a backlash: Tidal might make big artists richer, but what can it do for other musicians: those who have small but fervent fanbases, or who operate in particular niches, or who have the potential to be the next Jay Zs, Chris Martins and Beyoncés but are just at the start of their careers?
What will Tidal do for them? Especially as with its new aimed-at-the-mainstream $9.99 subscription tier, the margins are unlikely to afford much opportunity to boost the payouts to artists – or rather to the labels and publishers who distribute those payouts to them, which is something else Tidal won’t be able to control.
The frustrating thing is that this question should have been anticipated, and could have been addressed from the stage last night in a sentence. “Tidal is for all artists no matter what their scale: we will help you build your audience, but we will also help you build your businesses.”
Tidal has a shot at doing both. How? Here are some ideas:
1. Even before its former parent company Aspiro was bought by Jay Z, Tidal (and its now-rebranded older sister WiMP) stood out from the streaming crowd with its emphasis on editorial content as well as music. Going beyond playlists to reviews, features and interviews – but with playlists wrapped around all that too – has plenty of potential to help emerging artists reach more listeners, as well as opening up new audiences for other musicians.
2. Tidal’s artist owners may take their responsibilities seriously to bring through the next generation of musicians under their patronage, and also to direct their fans towards the music that inspired their own work. All of the artists involved in Tidal have clout beyond their massive followings on social networks, so how can they use that clout in a meaningful way to drive audiences to other musicians? Creators as true talent-spotters and curators, then.
3. There’s a strong case to be made for streaming as the funnel towards or engine powering every aspect of a musician’s business, from live and merch sales through to crowdfunding. Tidal could look at what Spotify has done with its ticketing and merchandise partnerships, and push it on a few steps. Even deeper, smarter integrations of tickets and merchandise. Proper partnerships with the likes of PledgeMusic, Patreon, Bandcamp, Kickstarter, BandPage and other fan-funding / D2C services. Maybe even adding micro-payments within Tidal itself, which opens up possibilities like top-up payments for ‘superfan’ stuff.
4. Tidal could try to become an artist-to-fan communications platform that delivers what Facebook used to before it started squeezing organic reach of people’s page posts. Artists posting a status update on Facebook know it’ll only be seen by a small percentage of their followers unless they pay to boost it. What if artists posting a status update on Tidal could know that it would reach every single fan who’d chosen to follow them on the service, plus a decent percentage of the ones who’ve been listening to them enough to qualify as fans? Spotify’s current ‘Follow’ feature, but supercharged.
5. There’s another way to make meaningful revenues from being Jay Z, Beyoncé, Rihanna and the rest: brand partnerships. Tidal’s artist owners are well connected with some of the world’s biggest brands, many of whom have at least dabbled in grass-roots music sponsorships and marketing activity. Can Tidal act as a magnet for brand budgets that redirects that money towards emerging artists? (e.g. Jay Z to Samsung: ‘I’ll sign this deal, but as part of it I want you to sponsor 50 Tidal artists for $10k each over the next year, plus events and c0-marketing activity’).
In truth, all these five ideas apply as much to companies like Spotify, Apple and Google/YouTube, in terms of making streaming work better for musicians beyond the big stars.
How can they break emerging artists through editorial and playlists? How can they funnel audiences from big stars to new acts? Can they get a move on joining the dots between streaming and fan-funding? Can they replace Facebook as the social conversation channel between artists and fans? And how can they connect brands with emerging artists?
Tidal, like its rivals, will be thinking hard about all these questions, even if it wasn’t ready to talk about its answers last night. That’s why Tidal’s potential to disrupt the streaming music market shouldn’t be judged on its awkward launch event or prejudices about big stars only in it for themselves.
And it’s also why the wider drive for streaming to benefit all sizes and types of musician is only just beginning. If Tidal’s starry relaunch sharpens the will of Apple and Spotify to tackle these challenges – and it shouldn’t be forgotten that Spotify has been chipping away at several of them for some time – then things are looking up.