Image Credit: TIDAL
TIDAL brings a User Centric Payment System to their music streaming service, but as per usual with UCPSs, there’s a catch.
As mentioned in our previous article, TIDAL have switched up their subscription tiers, now offering CD quality audio to $9.99 per month HiFi subscribers and full resolution audio up to 9216 kbps (24-bit/192 kHz) to $19.99 per month HiFi Plus subscribers. All great news for streamers, though not quite up to the standards of Apple Music and Amazon Music. While higher resolution audio will be the biggest difference for listeners, the most interesting differences for artists whose music is streamed via HiFi Plus is Direct Artist Payouts and Fan-Centered Royalties.
Direct Artist Payouts
“Up to 10% of your subscription is directed to the artists you listen to the most”
Direct Artist Payouts gives artists access to another payment stream. TIDAL says up to 10% of your monthly subscription is directed to your most streamed artist, while a new activity feed shows exactly where your money goes. An interesting idea we haven’t seen from any other major streaming service, where artists will benefit directly from their biggest fans. We’re not really sure what the “up to” means and could be a red flag, but 10% of the $19.99 HiFi Plus tier is roughly $2, which is sure to add up from artists with many loyal fans.
“The artists you stream get paid based on your streaming habits”
Coming in January 2022, Fan-Centered Royalties, otherwise known as a UCPS (User Centric Payment System), means royalties aren’t aggregated by the streaming service. Instead, royalties from your subscription fee go to the artists that you stream the most. This way, fans directly support the artists they love. Once again, the activity feed will shows where your money goes. TIDAL claims “artists will see significantly higher per-play-rate than the standard rate of other streaming services”. While this statement can’t be true for all artists, a UCPS is thought to benefit the smaller artists with dedicated fans. TIDAL shared the infographic below that attempts to show how a UCPS works, but it really doesn’t.
We’re building a platform that values art, artists, and culture, and for the first time, opening the platform experience up to a wider group of fans with the free tier. TIDAL is giving artists fairer earning terms and quicker payments, and fans are getting a better way to support their favorite artists. These offerings are the first step of many, as we’re excited to collaborate with artists to evolve our tools to help them continue to grow and create on their own terms.Jesse Dorogusker, Head of TIDAL
Most major music streaming services currently use a pro rata model that is thought to unfairly benefit biggest artists over smaller artists. Many agree that a User Centric Payment System is a fairer way to share subscription money with musicians. For more details on how UCPSs works, click here.
UCPSs are an idea that have been discussed by other streaming services such as Deezer and SoundCloud, but never rolled out in a big way. Deezer are yet to launch the system and SoundCloud only use UCPS for artists distributing their music through SoundCloud. We are yet to see any major music streaming service fully adopt a UCPS. Unfortunately while TIDAL are beginning to explore a UCPS, the system will only be implemented on their higher $19.99 per month HiFi Plus subscription tier.
All of that being said, the new My Activity feed, providing users with real data about which artists receive how much of their subscription money, is awesome and represents transparency we’d love to see across the entire music streaming industry.
This change in the way royalties are allocated, come alongside a new free tier and cheaper HiFi streaming. These two lower tiers will be much more popular than the HiFi Plus tier the above applies to. While the Free and the cheaper HiFi tiers will help TIDAL grow in users and subscribers, these will generate TIDAL less money per user for artists, potentially leading to a lower overall payout. While these updates are great news for users, don’t take TIDAL’s claims of helping artists out at face value. We’ll have to wait and see what impact the changes have in the coming months.