Tidal trickles down direct-artist payments

The Future. Tidal plans to roll out a feature that sets aside 10% of subscription revenue for artists that each subscriber listens to the most. That means that fans are directly giving part of their subscription payment to the artists they love — no matter how big or small. The feature could be a major boon to independent artists with a cult following, who typically must rely on touring to pay the bills.

Dollar distribution
Artists are about to make a little more money on Tidal.

• The streaming service partnered with independent music distributor DistroKid to offer direct payments to artists on the platform.
• Instead of just receiving a fraction of cents per stream, Tidal will pay up to 10% (about $2) of a user’s monthly subscription fee to the artist they listen to the most that month.
• The payout percentage decreases if you subscribe through Apple or Google, which takes a cut before Tidal collects revenue.
• The payouts only apply to subscribers of Tidal’s HiFi Plus plan, which costs $19.99 per month.

After striking deals with over 100 labels, Tidal plans to roll out the feature on the platform next January.

Connect the dots
Tidal’s “fan-centered royalties program” is an example of a user-centric payment system (UCPS), which is also used by streamers such as Deezer and SoundCloud. This model rewards artists for being a “favorite artist” of users while letting users know that they’re supporting artists they listen to the most.

Meanwhile, major platforms like Apple Music and Spotify pay what’s called “pro-rata” — a percentage of a pool of money based on total streams overall. That model pays artists about $0.0038 per stream… while a UCPS pays at least $0.01 per stream.

That extra money adds up… especially when an independent artist needs 283,684 Spotify streams per month to pay a monthly rent of $1,078 (the U.S. median). Now imagine how many streams they need to pay the rent in L.A.