How TIDAL Can Deliver On Its Promises

The continued media feeding frenzy around Jay-Z’s TIDAL demonstrates just how valuable star power is for cutting through the clutter.  What has helped sustain interest is Jay-Z’s vision for delivering better value to artists and better experiences for music fans.  It is a tall order given that TIDAL has to operate under the same basic licensing framework as all other streaming services, the nub of which is paying c. 70% of all revenues to rights holders and having no control over how much of that gets paid back to artists and songwriters.  Working within the constraints of the standard subscription model TIDAL will quite simply not be able to deliver on its aspirations.  But if TIDAL is willing to create a new model to layer on top of it, then it can do something truly transformational.  Here’s how.

The Problem With Streaming

First we need to look at the issue TIDAL has to fix.  The problem with streaming services is that they inadvertently weaken music fans relationships with musical works.  In the pre-streaming, music sales model consumers paid for an album or single and matched their cash investment with an investment of time in listening to it.  The alternative was to listen to their older music collection or the radio.  So even duff albums not only got money spent on them, they got listened to a few times by their buyers.  And even if they didn’t get listened to even once the artist still got paid.   So a portion of music sales revenue had no relationship to the quality of the music.  Streaming changed that, effectively making the music itself more accountable to its audience.

With streaming, music fans don’t need to waste time listening to music they don’t like upon first listen.  They can bypass the duff.  They also tend to listen less to any single piece of music in general because they have so much other music to choose from at no additional cost.  Artists earning a 150th per stream of what they earn from a download is thus only part of the problem.  Most of the time their mainstream fans (and by that I mean not their top 10% of super fans) aren’t listening to them enough.

Scale Will Come, But It Will Take Time

The theory is that this will be fixed by scale, that a massive installed base of users will result in bigger listening volumes.  But it’s not that easy.  To illustrated, let’s assume people listen to albums an average of 5 times each then you need 30 times as many people to listen to generate the same income as a sale.  So until we get much bigger scale from streaming (e.g. 150m+ subscribers globally) we need to look at how to encourage music fans to concentrate their listening more on the artists they really like.  This is where TIDAL can come into play:

  • Artist channels: Earlier this year I laid out a vision for artist subscriptions.  In this model subscribers pay an additional fee (say $1 or $2) to their standard streaming subscription to get access exclusive programming, content and other experiences from an artist. Subscribers choose from a selection of artist channels and subscribe individually or pay for a bundle.  Think of it like adding sports or movies to your Pay TV subscription.
  • Additional content: Because subscriptions already give you access to all the music in the world (well most of it) subscribers will not be paying their extra $1 or $2 to get to the artist’s music. (Taking the music out of the core subscription and locking it into premium channels is a bad idea and doesn’t fix the artist income issue as we’ll see in a moment).  Instead fans will be paying for a mixture of additional content (live streams, interviews, acoustic sessions, photos, videos, games, curated playlists, mobile content, handwritten lyrics etc.) that will be delivered as a curated, programmed whole.  These channels will need to ascribe to the D.I.S.C. principles i.e. they music be Dynamic, Interactive, Social, Curated.  Sure each of the individual components could probably be found somewhere on the web but the real value is the entirety of the experience.
  • Artist revenue share: Where this model gets really interesting is how artists get paid. If all the additional content that is delivered is outside of the standard label catalogue then TIDAL could, after some basic costs are accounted for, split the entire additional $1 or $2 subscription fee 50/50 with the artist.  Or if TIDAL is that serious about making things better for artists, they could give all of the net profits to the artist. (Label 360 deals might complicate things a bit for some artists but they will not account for large percentages). Just how songwriters would benefit is a bit more complex as many artists have multiple songwriters etc. but TIDAL could set aside a songwriter pot to be distributed based on plays of the artist’s core music.

Right now TIDAL is a music service pretty much like the others but with bold ambitions.  This is one way that TIDAL can turn worthy words into meaningful actions. There aren’t too many other ways it can do so.  And of course any of the other streaming incumbents could do this too.  The difference is that that they have had a lot of time to do it and have not done so, yet at least.

So TIDAL, come show us how it is done.  Over to you Jay-Z.

12 thoughts on “How TIDAL Can Deliver On Its Promises

  1. Like Lili said, without a best high quality music device, like Aivvy Q, it’s impossible for tidal to reach real public mass.

  2. Here’s the main issue few are acknowledging: you can throw all the exclusives you want at a service, but social interaction and transaction will trump exclusives almost every time. Music fans want to know their friends are using the same service so they can share songs, playlists and albums quickly and easily. Spotify has built this stickiness and critical mass, and it will take considerable effort by Tidal or anyone else to dislodge these folks. The MOST you could hope for is a Spotify user spends money on Tidal for a month to get the exclusive stuff then cancels their account once they have it.

    Also users are smart. Most know there’s no such thing as “exclusive” anymore anyway. This same content will either be available through free channels immediately or through legit channels soon enough. Taylor Swift pulling her music from Spotify did nothing to dent their userbase because the fans who cared already had it anyway and the regular listeners just went on to something else.

  3. Hi Mark and MIB. I have a question unrelated to your content. Why do you use two spaces after every sentence? It’s an outdated convention based on the kerning problems writers faced using hard-carriage-return typewriters (that may not be entirely true but it’s plausible, and I’m too laser-focused to check “the Google”) and it’s no longer necessary to follow this rule. Writers who still use this needless convention appear out-of-touch, like even worse than using a Hotmail address. Sorry. Just saying.

  4. Exclusive content won’t cut it I fear. As per above, it’s all out there anyway so it would need to be pretty damn special.

    A *premium* new release window for streaming makes sense though. I think that deals with capturing more value from fans of all stripes immediately and delivers a tangible differential. It would mean a hefty restructuring of licensing to this emerging industry across the board though. It’s the Movies and TV model.

    If I was an Indie label today I’d hold back all my new releases from streaming services to max the transactional sales for say 6 months, then release into the subscription window. Am certain I’d generate more income overall that way.

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  6. Pingback: A Journal of Musical ThingsWhat Tidal Has to Do to Survive - A Journal of Musical Things

  7. Although I know little about the industry and how the various players are remunerated, I do feel that any model based on tying to a sale something which the consumer doesn’t want will be replaced by another which does not. I think the strengths of your proposals lie in offering something which is of value. 2 things which I believe the consumers want, are a) the ability to enjoy a more intimate relationship with their favorite artists (something which your proposals seem to address, in part), and b) the ability of the consumer to share their relationship with their music with their friends (I don’t think this is included in your proposals, but appears to be addressed to some extent by Spotify, of which I have limited knowledge). The artists can help with a). As for b), if a TIDAL customer could easily export her playlist and send it to be streamed on any platform (in hifi, and regardless of whether the recipient was a TIDAL subscriber or not), that might help with b) (and might draw more users by exposing them to the hifi experience). If TIDAL could facilitate both, it might offer a more interesting value proposition. For the record, I do believe that TIDAL is a bit over-priced, so they should work on that as well.

    Hayward – like, to draw your “attention” and keep you out of the like substance of this thread, I like put 3 spaces after every sentence. I think you should like get your laser-focus checked, as it points to the possibility that you are in fact like out-of-touch. Just saying.

  8. To be honest, regardless of quality, regardless of exclusives, I hope it fails. Jay Z just wants to be Dr Dre. Jay Z will never be Dre

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  10. Pingback: How TIDAL Could Deliver On It’s Promises | South Carolina Music Guide

  11. Pingback: Musique et numérique : l’actu de la semaine | NUMESIQUE

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