How can artists be fairly remunerated in the context of flourishing streaming platforms is a question that TIDAL now wants to answer first and foremost with the new option of direct payments to artists.
TIDAL sees itself as a pioneer of fair remuneration for artists in times of flourishing streaming services. In cooperation with a number of well-known major and indie labels as well as distribution partners, the company says it is endeavouring to completely redesign royalty payments to artists and rights holders and to make them transparent.
These new approaches go far beyond current industry standards and are intended to prove that both music lovers and rights holders, including artists, can benefit from the growing interest in music streaming as a form of distribution.
Only 0.4 per cent of all musicians can live from streaming income
According to TIDAL, the current situation is that with streaming platforms such as Spotify, Apple Music and others, only 0.4 per cent of all musicians can live off their streaming income, according to a recent study. According to TIDAL, the reason for this is the outdated remuneration models that look at the cumulative streaming figures of all artists and ignore the individual preferences of the listeners. This is exactly where they want to start in order to improve the precarious situation of many artists.
Sustainable and fair streaming
TIDAL strives to be a sustainable and fair streaming platform for artists and music enthusiasts. To this end, a number of measures are to be taken at once, as the company has now announced in a press release.
“TIDAL is taking the next step to bring about a real paradigm shift in music streaming. Since the beginning of TIDAL, we have had the vision to create a streaming platform that is fully focused on artists and fans and ensures a fair playing field. TIDAL’s new subscription model introduces fast direct payments for the first time, allowing music lovers to directly support their favourite artists. We are looking forward to using our new tools to support both small and large artists around the world. From now on, we are breaking completely new ground in the market.”
Lior Tibon, Chief Operating Officer of TIDAL
Direct artist payments
TIDAL plans to introduce monthly direct payments to artists with immediate effect, according to the company. This is seen as an innovative programme that guarantees musicians an additional source of income.
Artists will be paid directly by their fans on TIDAL, with a percentage of TIDAL HiFi Plus subscribers’ membership fees going to the most streamed artist they see in their activity feed each month.
TIDAL explicitly emphasises that this direct payment to the artists is additional income, which is thus distributed independently of the regular streaming royalties.
What this means in practice is described by the streaming provider as follows: every month, ten per cent of the HiFi Plus subscription price is distributed to the artist most listened to by the respective user. According to TIDAL, direct artist remuneration therefore brings artists and their biggest fans even closer together.
In the latest TIDAL app, users can see at any time exactly to whom their direct artist remuneration is paid.
TIDAL also announces that it is taking a completely new approach to royalties from 2022. Royalties will be paid based on the actual streaming activity of each TIDAL HiFi Plus subscriber, as opposed to the industry standard method of aggregating streams and allocating them to the most popular artists.
It is precisely this procedure that is criticised time and again by artists and rights exploiters, as only a very few profit from it, while the majority goes empty-handed.
Here, too, TIDAL practically sums it up: through TIDAL HiFi Plus, artists are paid much better per individual stream than with other well-known streaming providers.
Instead of combining all streams in a per-rata model, with TIDAL HiFi Plus the royalties are only paid to the artists who were actually listened to by a user. Fans will be able to see this in their TIDAL feed from January 2022.
Cooperation with payment service providers and distributors
TIDAL also states that it is now cooperating with a wide range of payment service providers in order to provide a particularly broad basis for settling accounts with artists. For example, services such as Square, Cash App and PayPal are listed in order to guarantee direct payment to artists worldwide without detours. Leading distributors such as CD Baby, DistroKid, Equity Distribution, Sterm, Symphonic, Tunecore and Vyda have also joined the initiative, according to TIDAL.
These partnerships, TIDAL says, ensure that artists who distribute their music through these distributors receive their payments seamlessly through their respective platform’s internal registration.
Registration for artists on a broad basis
In order to receive direct payments, artists will need to register via invitation through direct registration or through distributors, the company said. TIDAL will further open up access to the programme in the coming months, it added. Information for artists whose music is available on TIDAL will be made available at TIDAL.com/ForArtists.
Getting to the point
It’s a completely new approach that TIDAL is now taking to paying artists, the company’s intention being to develop a fair, sustainable business model. In fact, it is high time that the focus around streaming is put on the artists first and foremost, with regard to a decent and thus really fair payment. Even thousands and thousands of streamed titles have brought in nothing so far, while on the other hand, old forms of distribution around classical recordings are plummeting. It remains to be seen how TIDAL’s new approaches will ultimately prove themselves in practice, but it is at least gratifying to see that things are moving.