Tidal invests in artist direct payments, a step towards fair streaming payments – TechCrunch

Tidal and DistroKid, a popular independent music distributor, teamed up last week to introduce a direct payment system to artists. This partnership foreshadows a larger pivot for Tidal to experimenting with streaming payment models that are supposed to distribute funds more equitably to musicians who don’t receive millions of streams on any given day (AKA, people who aren’t. not Taylor Swift or Lil Nas X).

If you’re subscribed to Tidal’s Hi-Fi Plus plan – which costs $ 19.99 per month – up to 10% (or about $ 2) of your monthly subscription fee will go to your most listened to artist (both that this artist uses DistroKid). This percentage decreases if you pay for your subscription through a service that takes a cut, like the Apple or Google app stores. Tidal told TechCrunch that it has also made similar deals with independent distributors such as CD Baby, Equity Distribution, Stem, Symphonic, Tunecore and Vydia.

This model is an example of a User-Centered Payment System (UCPS), which is generally favored by artists. As described by Deezer, a streaming service that uses UCPS, this system helps individual fans more directly and transparently support their favorite artists, since their subscription fees are distributed to the artists they listen to. So, let’s say you listen to a 10-track recording once on a platform that pays around a cent per stream, like Apple Music. Then that artist will earn ten cents (and that’s before distributors and publishers take their share). But, on a UCPS platform like Deezer or Soundcloud, if you listen to ten albums by ten different artists in a month, part of your monthly subscription is split among those ten artists, which means they are probably getting more than ten. cents each. It’s similar to buying a CD – it’s not how often you listen to that CD, but rather the fact that you bought it in the first place.

Tidal told TechCrunch that beyond its agreements with independent distributors, some sort of UCPS will come to its HiFi Plus level from January 2022. The platform claims to have partnered with over 100 labels – both big labels and independents – to develop what she calls her fan-centric royalty program.

Currently, major streaming platforms like Apple Music and Spotify pay per stream. But the growth of music streaming services – an attempt to respond to the music piracy crisis – has, on the whole, not been great for musicians. The main source of income for musicians now is touring, so when the pandemic hit and canceled a slew of concerts, the inequity of streaming payments became even clearer.

Last year the Union of Musicians and Assimilated Workers (UMAW) launched a campaign called Justice at Spotify, which calls on the streaming giant to adopt UCPS, increase payment transparency, and pay at least $ 0.01 per stream. As it stands, the platform is estimated to pay an average of $ 0.0038 per stream according to UMAW, but Spotify itself is not disclosing this value, claiming that paying per stream is not. a significant value to analyze.

“We applaud the evolution of Tidal to a more user-centric payments system, a change we have been demanding since the launch of our Justice at Spotify campaign in 2020, and already adopted by Deezer and Soundcloud,” said Joey DeFrancesco in a statement to TechCrunch. on behalf of UMAW. “User-centric isn’t a silver bullet, and we desperately need more fundamental changes to streaming royalties, but it’s a step in the right direction. “

Comparatively, Apple Music pays an average of $ 0.01 per stream, per internal memo leaked earlier this year. Tidal is believed to pay roughly the same, although the company itself has not confirmed these numbers. But Spotify, which has the most subscribers out of the top three streaming media, pays the least.

Spotify points out that it appears to pay less per stream than its competitors because, according to the company, Spotify users stream more music than users on competing platforms. Additionally, unlike Apple Music or Tidal, Spotify offers a free tier, subsidized by ads, which the platform says could skew its payout metrics.

Streaming payments don’t reach the artist directly – first, the payments are split between an artist’s record companies and publishers. How much an individual artist will get per stream depends on their contracts in the industry. But for now, according to UMAW, a freelance artist would need to amass 283,684 Spotify streams per month to pay a monthly rent of $ 1,078, the US national median.

Spotify took a minority stake in DistroKid in 2018, but just a few weeks ago Spotify’s quarterly SEC filing revealed that it had sold two-thirds of its stake in the independent distributor for $ 144, or approximately $ 163 million. It’s an interesting time for DistroKid to immediately strike a deal with Tidal, a more music-friendly service, to adopt a version of the policies that UMAW demands of Spotify.

But Spotify doubts how much user-centric payments would actually benefit artists. A study by the National Music Center in France found that annual payments fluctuated by “a few euros at most” for artists not in the top 10,000 groups.

“We’re ready to move to a user-centric model if that’s what artists, songwriters, and rights holders want to do. However, Spotify cannot make this decision on its own – it takes broad industry alignment to implement this change, ”the platform’s website explains.

So perhaps Tidal’s model of independent distributors agreements – a variation of UCPS – could be more beneficial to artists. A bonus of $ 2 per month per user for being their most circulated artist could add up. But, industry-wide changes like these may require trial and error to determine how streaming platforms can manage their businesses while fairly paying musicians for access to their music.