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Would You Pay $10 More for Streaming if it Guaranteed Your Favorite Bands Got Paid?

Tidal will adopt fan-centered royalties for subscribers who join their HiFi Plus tier

By Paul Marszalek

Just about anyone who’s been paying attention to the issue has come to realize that when it comes to artist royalty payments, the whole streaming thing really isn’t working out very well.

There’s little traction for change here in the U.S., but action could come from elsewhere in the world. Already, the U.K. Parliament has basically called B.S. on the payment structure, and Britain’s competition regulator doesn’t like the size of the streamers — especially when you tie-in the ownership stakes of the labels themselves.

Peeling back the onion a layer reveals two problems: First is the paltry fractions-of-a-cent paid per stream, second is how the money is divvied up.

The first problem is that the payments are simply too low, with each of the streamers paying a different rate – Tidal is most artist-friendly at .0125 cents per stream; YouTube being the worst (by a mile) at .00069 cents per stream. To reach the Federal minimum wage ($7.25/hour), an artist needs 100,500 streams per month on Tidal; 1.8 million on YouTube (which, by the way, adds up to about $15,000 a year – well below the poverty line.)

The second problem is that the money is not paid out based on actual streams of actual artists, but instead based on estimates and algorithms. In truth, most of our core artists really never see any of our money – it’s all aggregated and paid out to the top artists on the platform.

This patently unfair approach can give you the Cable TV cord-cutting urge you get when you think about the huge portions of your monthly payment that go to owners of knucklehead channels you never watch.

The lack of transparent, direct payments to artists is a curious problem considering streaming companies are tech companies.

How can they not have solved this? Partly because they could get away with not solving it, and partly because it’s expensive to do so. However, developing the tracking and direct payment infrastructure is completely doable. In fact it’s here, but it comes at a cost.

And that cost is $10 more per month — double what you’re already paying.

The provider is Tidal.

Starting in 2022, Tidal subscribers with the $19.99/month HiFi Plus plan will not have their payments aggregated into a big bucket of money. Instead, their payments will become fan-centered royalties – directly paid to exactly who they listened to.

It’s a first in terms of empowering fans to directly support their favorite artists in the streaming realm.

Expensive? Yep. Compelling? Absolutely – especially since you’ll also get high-end, lossless audio.

However, what’s most interesting about the direct payment innovation is that it demonstrates that the problem can be solved, and when the U.K Parliament and/or the E.U. sees this, more artist-friendly regulation will very likely follow.

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