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How TIDAL Could Deliver On It’s Promises

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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
. But how far can those
promises carry TIDAL unless they deliver?

 

               
                 
                 
                 
                 
        

Guest Post by Mark
Mulligan 
on Music Industry Blog

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.


TIDAL-Streaming
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.

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