Tidal and DistroKid, a popular independent music distributor, teamed up last week to introduce a direct artist payments system. This partnership foreshadows a larger pivot from Tidal toward experimenting with streaming payout models that are thought to distribute funds more equitably to musicians who don’t get millions of streams on any given day (AKA, people who aren’t Taylor Swift or Lil Nas X).
If you’re subscribed to Tidal’s HiFi Plus plan — which costs $19.99 per month — up to 10% (or about $2) of your monthly subscription fee will be distributed to your most-listened-to artist (so long as that artist uses DistroKid). That percentage shrinks if you’re paying for your subscription through a service that takes a cut, like the Apple or Google app stores. Tidal told TechCrunch that it also struck similar deals with independent distributors like CD Baby, Equity Distribution, Stem, Symphonic, Tunecore and Vydia.
This model is an example of a user-centric 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 fee is distributed to the artists they listen to. So, let’s say you listen to a 10-track record one time on a platform that pays about one cent per stream, like Apple Music. Then, that artist will earn 10 cents (and that’s before distributors and publishers take their cut). But, on a UCPS platform like Deezer or SoundCloud, if you listen to 10 albums from 10 different artists in a month, then a portion of your monthly subscription fee is divided among those 10 artists, which means they’re probably getting more than 10 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 deals with independent distributors, a kind of UCPS will come to its HiFi Plus tier starting in January 2022. The platform says it teamed up with more than 100 labels — both major labels and independents — to develop what it calls its fan-centered royalties program.
Currently, major streaming platforms like Apple Music and Spotify pay pro rata, which divides a pool of money based on total streams. But the growth of music streaming services — an attempted answer to the crisis of music piracy — has been, on the whole, not great for musicians. Musicians’ primary source of revenue is now touring, so when the pandemic hit and canceled a slew of concerts, the inequity of streaming payouts became even clearer. Click here for more.