TIDAL to launch user-centric royalties system and direct-to-artist payments - Music Business Worldwide (2024)
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.
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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
In November 2021, when TIDAL launched its 'Fan-centered royalties' system, the music streaming company also launched an initiative called direct-to-artist payouts, aka DAP. The DAP program sees a percentage of TIDAL's HiFi Plus subscribers' membership fees directed towards their top streamed artist.
Musicians earn money on Tidal whenever one of their songs is streamed by a Tidal subscriber. The way that these payouts work is complex, depending on different factors like the agreements negotiated between the platform and record labels, artists, and distributors.
TIDAL's pay per stream rate is between $0.01 and $0.05, with the average payout being $0.01284 per stream. The average payout is nearly triple that of other music streaming services with larger user bases. So, given the TIDAL payout per stream, how many streams would earn you $1?
TIDAL HiFi Plus currently holds a large advantage over Spotify when it comes to playing surround sound audio. With support for tracks mixed for Dolby Atmos, TIDAL HiFi Plus users can listen to surround sound music on their headphones or even on their TV or home stereo setups.
While some observers praised the high-fidelity audio quality, and higher subscription fees that would result in higher royalties to the artists and songwriters, others felt the high subscription fees and exclusive Tidal content from the artists involved could lead to more music piracy.
How Much Tidal Pays Per Stream in 2023. Tidal, a high-fidelity music streaming service, pays artists one of the highest rates per stream, ranging from $0.0125 to $0.015 per stream. So you have a chance to earn $1,250-$1500 for every 100,000 streams on Tidal.
Our favorite music streaming service for audiophiles, Tidal gives you the best sound quality options for your money — and does a better job compensating artists than its major competitors.
It's easy to have your music on TIDAL. Create a free account with iMusician and upload your music via your dashboard. We take care of the rest. There's no catch or hidden costs.
On average, TIDAL pays out around $0.013 per stream in 2023. TIDAL is one of the select few streaming services which pays out more than 1 cent per stream, with artists needing roughly 80 streams to earn a dollar and 80,000 streams to earn $1000 (roughly £880).
According to Reuters, the complaint quoted an NYU business professor who called the purchase “a $300 million bar tab to hang out with Jay-Z.” Jay-Z initially bought Tidal (then called Aspiro) with several others in 2015 for $56 million.
We can look back to the equivalent quarter in the last couple of years, though. These revenues had fallen from $58m in Q3 2021 to $56m in Q3 2022 – in both cases described as “primarily Tidal” without the Cash App / Square intersegment eliminations part.
Tidal may not be as popular as Apple Music or Spotify, but it is the go-to streaming platform for lossless and hi-res music. It has more than 110 million tracks that you can listen to in CD-quality sound, along with 650 thousand videos and plenty of exclusive content (e.g., livestreamed concerts, podcasts).
Apple focuses more on editorial playlists and radio. It counters Tidal with stronger curation through playlists and radio stations and tighter integration with iOS devices and Siri. But Tidal's UI feels more tailored to the experience of hardcore music fans who value audio quality and getting lost in discographies.
A year on, how are things looking? Block's latest financials reveal $38m of corporate and other revenues for Q4 2022, although the description of what that includes has expanded to “primarily Tidal and intersegment eliminations”. This segment's gross profit rose from $7m in Q4 2021 to $11m in Q4 2022.
On average, TIDAL pays out around $0.013 per stream in 2023. TIDAL is one of the select few streaming services which pays out more than 1 cent per stream, with artists needing roughly 80 streams to earn a dollar and 80,000 streams to earn $1000 (roughly £880).
Every time someone streams your music on TIDAL. You get paid, and we put your money directly into your TuneCore account. TuneCore will never take a cut of your sales revenue.
According to Viberate, the high-fidelity streaming service Tidal pays the highest royalties per stream ($0.0125 to $0.015). Artists will tend to earn $1,250 to $1,500 for every 100,000 streams on this platform. Below, we present the average streaming royalty rates for the six most popular music streaming platforms.
When will I get paid by Tidal? The estimated turnover for receiving Tidal payments is around two months from the time after your tracks have been successfully uploaded and released. You can expect to receive 100% of your Tidal royalties directly into your Ditto account as soon as we receive them from the platform.
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