Monday, April 27, 2015

Is Jay-Z’s Tidal Making a Splash in the Streaming Industry?

In March 2015, Jay-Z along with other A-list musicians re-launched Tidal, a lossless audio and high-definition music streaming service. To date, Tidal offers two subscriptions tiers comprised of the “TIDAL premium” tier, where listeners pay $9.99/month for unlimited streaming of songs in high quality without ads, and “TIDAL Hifi,” which provides users the ability to stream 25 million tracks in high-definition audio for $19.99/month.

Shortly after Tidal was announced, Jay-Z participated in a Q and A where he addressed Tidal’s pay structure and how up and coming artists can benefit from the service. Specifically, Jay-Z used this Q and A as a platform to reveal that Tidal will pay the highest royalty percentage to artists out of all the currently available streaming services. And in particular, Tidal executive Vania Schlogel discussed the lack of a free streaming tier, attributing its absence to free music streaming and consumption having contributed to “depressing the record music industry” along with “the downfall of the recorded music industry.” But, in reality – does Tidal provide musicians with more royalties?

Throughout the marketing campaign surrounding Tidal, it was consistently emphasized that it would be significantly better for musicians than other streaming services such as Pandora. But the problem facing musicians isn’t streaming services like Spotify or Pandora not sharing enough of its subscription and advertising revenue. In fact, Spotify published a blog post at the end of 2014 stating that it has paid more than $2 billion dollars in royalties to record labels, publishers, and collection societies since its launch in 2008.

Instead, the challenge facing artists is that recording labels treat each “stream” as a sale, which means artists only receive 10% to 20% of the label’s royalties. And with musician's compensation governed, and restricted, by each individual musician's contract, the only artists who profit off the increased subscription price are those with shares in the business.

But since not even Jay-Z can amend each artist's contract with their record labels, it seems unclear if Tidal will be making as big a splash as predicted by the music moguls who helped rebuild the streaming service earlier this year.

                                                                                                                                 - Erica Vincent
                                                                                                                               Managing Editor

No comments:

Post a Comment