A few months ago, I laid out the reasons that Spotify pays artists so little, and 3 specific ideas to change it, making it a profitable income stream for musicians. It may not be Spotify that does this, but I hope someone comes along and implements at least part of this idea.
And then came Tidal. It’s a music streaming service that Jay-Z bought a few months ago that just re-launched. The 2 big selling points with Tidal are that it’s “owned by Artists” and features higher sound quality than other streaming services.
Here’s the thing: Tidal is a step in the right direction, but we’re not there yet. Not by a long shot.
Things Tidal Gets Right
1. Limiting Free Accounts
Spotify argues that having a free tier is the only way to get people to sign up for the paid tier. But by making the paid tier only slightly better than the free one, there’s little incentive to upgrade. This results in 75% of Spotify users keeping their free accounts, and bringing the Artist payout down in the process (more on that breakdown here).
While I don’t think it’s necessary to completely elimnate the free tier, Tidal has done away with it completely. This raises the barrier of entry for consumers, but ensures higher payouts for Artists. It’s on the opposite end of Spotify’s business model, but Tidal knows that the free accounts dillute royalties. This is a good idea, but I wouldn’t be surprised if Tidal adds a limited free account within a few months.
2. Exclusive Content
House of Cards. Orange is the New Black. Unbreakable Kimmy Schmidt (so funny!). These are all shows that are exclusive to Netflix. If you want to watch them, you have to subscribe to Netflix.
Tidal is also promising exclusive content from it’s artists. This is a smart move, but they need really great exclusive content, not just music videos (what is it, 1998?).
Reasons Tidal Will Fizzle Out
Put aside these 2 good ideas, and you have a whole mess of problems with Tidal. Let’s try and whip through them as quick as possible.
1. Tidal Artists Are Still On Spotify
If Tidal is going to succeed, it needs to have really great exclusive content. What better content than the 16 artists that are the “owners”? Consumers have no incentive to listen to Beyoncé on Tidal for $9.99/mo. when they could go listen to the same song for free on Spotify.
The Fix: All of the “owners” should put their music on Tidal exclusively. By keeping their music on Spotify, it only hurts Tidal, and proves that they don’t have much faith in the platform. (I’ll beat you to the punch: “But Piracy!!!???!” Sure, but let’s try this and see if it works. If in a year it sucks, each Artist is only out like, what, $2700 in missed royalties?)
2. High Quality Sound Doesn’t Matter
Tidal’s big selling point is that the sound quality is better than Spotify or any other streaming service. They charge $19.99/mo for their better sounding music (a $9.99 “standard sound” tier was added last minute). But here’s the thing: consumers don’t really care about sound quality.
The “high quality sound” sell only works on a small percentage of the population. Everyone else is listening on Apple earbuds, Beats by Dr. Dre, or the stereo in their 2001 Jetta.
The Fix:: Keep the high quality sound, but charge $9.99/mo for it. This will make Tidal technically better than Spotify, but at the same price.
3. The Press Conference
Did you guys see that? WHAT THE HELL. Here, watch this:
There are so many problems with this press conference. While it’s encouraging that musician awkwardness is universal, this was the one of the most uncomfortable things I’ve ever had to watch.
Next, using terms like “We’re taking a stand” makes the Artists on stage sound hostile. Are you mad at me? Do you want to hurt me? I’m so confused. Please calm down Kanye.
Lastly, the whole event was filled with a heavy dose of self-importance. Look, I get it, I’m all for a streaming service that pays artists actual monies too, but this isn’t a “historic day” or a “revolution” by any means. You launched a Spotify competitor, you didn’t cure cancer.
Oh, and what was with the “declaration”? You guys all signed your names on a piece of paper… and? Now what? What are you declaring?
The Fix: Musicians shouldn’t host press conferences. Ever.
4. Not Enough Transparency
Tidal is “owned by Artists” (or more specifically, 16 big name artists), and claims to payout twice the normal streaming rate. Great! Can we get some more information on that?
Spotify launched SpotifyArtists.com to explain to artists and consumer exactly how their business model works. If Tidal is going to make one of their big selling points Artist fairness, then they need to go into more detail.
The Fix: Elaborate on your business model.
5. This Isn’t About Jay-Z, Alicia Keys, Or Anyone On That Stage
I love Jay-Z. I really do. I can still recite every verse to “99 Problems”. But does Jay-Z need more money? How about Alicia Keys? Daft Punk? Madonna?! (please put your leg down, you’re embarrassing everyone)
Tidal simultaneously made a really great step forward, and completely missed the point.
All of the Artists on that stage represent a completely different music industry than what we’re in today. Theirs is a label-supported industry where sales (not streaming) is the business. And they’ve all made a killing.
Every time the Internet changes the music industry, we all collectively throw a toddler-like tantrum and complain that it’s unfair. The Tidal press conference was no different.
But you and I live in a different music industry. One where records don’t sell, they’re streamed, and we have to figure out how to make money any way we can. Not so that we can take Scrooge McDuck style baths, but so that we can pay our rent.
This whole streaming debate isn’t about Jay-Z making a killing. It’s about independent artists making a living.
The Biggest Thing Tidal Should Have Done
In order to succeed, a streaming service has to be appealing not only to the consumer, but to the artists creating the content. With all of this in mind, Tidal could have made huge waves (pun totally intended) if they emphasized the smaller artists.
What they should have done was explained in detail how their streaming royalties are calculated, how much streams pay, and how specifically artists can connect with their fans through exclusive content. Then set up a website where independent Artists can submit their music directly to Tidal, with no label, and an option for exclusivity.
That would have made this a game changing streaming service that stands a chance against Spotify. That would have been revolutionary.
Instead, we got this:
Photo Credit: Fe llya