TIDAL, acquired by Jack Dorsey’s fintech fim Square earlier this year for over $300 million, is planning to launch a user-centric royalties system for a new $19.99 HiFi Plus membership option.
Starting in 2022, the music streaming service is planning to adopt what it calls a ‘Fan-centered royalties’ approach for its new HiFi Plus members, and it says that it has the support from the “vast majority of its record label and distributor partners”.
Speaking to MBW, TIDAL COO Lior Tibon says that there are more than 100 partners on board, but didn’t specify names of companies.
Prior to today’s launch, TIDAL had two tiers, Premium and HiFi. It will now offer three membership tiers, including the new HiFi Plus for $19.99, HiFi for $9.99, and for the first time, a free tier called TIDAL Free.
Tibon explains that this free tier will “provide access to [TIDAL’s] entire audio catalog, primarily in shuffle mode with limited interruptions”. These interruptions won’t be from external ads, though, according to Tibon, but messages from the service itself.
Under the ‘Fan-centered royalties’ model, royalties attributed to HiFi Plus subscribers will be paid based on their individual streaming activity as opposed to the industry-standard method of aggregating streams and paying out to artists from a pool at the end of a payment period.
The user-centric idea has been gaining traction in the industry for a couple of years, with Deezer launching a public campaign in 2019 to champion what it calls a user-centric payment system (UCPS).
In March, in an industry-first move, SoundCloud went one step further and introduced its own version of the user-centric model, which it called “fan-powered royalties”.
SoundCloud later cited Portishead’s release of their ABBA SoS cover as having earned 500% more under its new system.
In addition to the ‘Fan-centered royalties’ system, beginning today, TIDAL has also launched monthly direct-to-artist payments, which will see a percentage of HiFi Plus subscribers’ membership fees directed towards their top streamed artist.
This direct-to-artist payment will arrive in addition to an artist’s streaming royalties.
“In the US as an example, if you’re on an individual HiFi Plus [membership] and you’re paying 19.99 a month, $2 will go into that plan and basically flow directly into your top streamed artist for that particular calendar month.”
Lior Tibon, TIDAL
How does it work?
Lior Tibon tells MBW that “up to 10%” of the amount of the subscription fee will paid to artists directly.
“In the US as an example, if you’re on an individual HiFi Plus [membership] and you’re paying 19.99 a month, $2 will go into that plan and basically flow directly into your top streamed artist for that particular calendar month,” he said.
TIDAL has teamed up with financial services-focused parent company Square, in addition to Cash App, and PayPal to process payouts to artists globally.
TIDAL has partnered with distributors CD Baby, DistroKid, Stem, Symphonic, and Tunecore, with Equity Distribution and Vydia launching soon, so that artists uploading music through those platforms are able to receive their payments via in-platform registration.
Artists will need to opt-in to access direct artist payouts, either through TIDAL’s invite-only direct registration option or through one of the platform’s distribution partners. TIDAL says that it will continue to open access to the program in the coming months.
TIDAL says that the new enhancements “deliver on its mission to create a sustainable, artist-first and fan-centric business model for the music industry”.
TIDAL’s membership options now include:
- TIDAL Free (US-only), which gives users access to the entire catalog and playlists, with “limited interruptions”.
- At $9.99/month, TIDAL HiFi offers “interruption-free access to HiFi sound quality.
- For $19.99/month, HiFi Plus features everything the HiFi tier offers, in addition the introduction of fan-centered royalties and direct-to-artist payments.
TIDAL says that HiFi Plus will also continue to provide access to immersive sound formats (Dolby Atmos Music & Sony 360 Audio Recordings) and Master Quality Authenticated (MQA), alongside early access to exclusive offerings and future features.
“We’ve invested a lot of time over the last few months educating people [about Fan-centered royalties] and we’re very pleased to have well over 100 partners, major labels, independent labels, distributors that are signing up to that for the HiFi membership tier.”
Lior Tibon, Tidal
Speaking to MBW, Tibon said: “From an artist perspective, there are two new programs that we’re launching. The principles behind them are number one, transparency. It’s very important for TIDAL, and being part of Square in particular, to highlight and promote transparency in the industry around payments and compensation across the board.
“And secondly it is really [about] creating new revenue opportunities for artists, to go above and beyond what’s available today in the existing systems [and to ]create a more sustainable ecosystem.
He added: “We’ve invested a lot of time over the last few months educating people [about Fan-centered royalties] and we’re very pleased to have well over 100 partners, major labels, independent labels, distributors that are signing up to that for the HiFi membership tier.”
“We’re building a platform that values art, artists, and culture, and for the first time opening the platform experience up to a wider group of fans with the free tier.”
Jesse Dorogusker, TIDAL
Jesse Dorogusker, Head of TIDAL, said: “We’re building a platform that values art, artists, and culture, and for the first time opening the platform experience up to a wider group of fans with the free tier.
“TIDAL is also supporting artists with fairer earning terms and quicker payments, and fans are getting a better way to support their favorite artists. These offerings are the first step of many, and we’re excited to collaborate with artists to evolve our tools to help them continue to grow and create on their own terms.”
“TIDAL has been with me since the beginning, providing emerging artists, like myself, with resources to pursue my passion.”
Sam Austins, singer and songwriter
Sam Austins, singer and songwriter added: “TIDAL has been with me since the beginning, providing emerging artists, like myself, with resources to pursue my passion.
“It’s exciting to see them continue to evolve their streaming platform to better support artists and their fans with new features like direct-to-artist payments. TIDAL was founded by artists, so the importance of economic empowerment is ingrained in what they do, no matter what stage of your career you’re in.”Music Business Worldwide