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A new year’s resolution for billionaire Jack Dorsey: Spend more time on Tidal, the music-streaming platform recently acquired by his fintech firm Block, and less time on Twitter, where he’s no longer in charge but still making himself heard.
Block’s $297 million purchase of a majority stake in Tidal was one of many post-Covid music milestones over past year, as superstar artists proved increasingly reliable and durable pandemic cash cows. Bruce Springsteen and the late David Bowie’s estate sold their back catalogs for reported nine-figure sums; an eight-hour Beatles documentary became a water-cooler moment for the Walt Disney Co.; and Adele indirectly broke the vinyl supply chain.
But given Tidal is a streaming minnow next to Spotify and Apple Music, whose combined market share is around 50%, it shouldn’t just mimic the elite hierarchy of the streaming giants. Hippie-capitalist Dorsey has said he wants to improve “economic empowerment†and “financial freedom†for all musicians, a worthy goal that merits more resources than hyping volatile cryptocurrencies like Bitcoin or “ hyperinflation†warnings.
Music is undergoing a very unequal rebound, rather like the wider economy. Music “got free†two decades ago when digital MP3 files made songs infinitely and instantly sharable; it then got $9.99-ified with the rise of all-you-can-hear streaming subscriptions. This brought industry revenues back to 20-year highs and buried CD, but deepened the split between the music industry’s haves and have-nots, with the top 1% of artists pulling in an estimated 90% of streaming royalties.
What the streaming economy foreshadowed, Covid delivered. Revenue from live music, the last refuge from half-penny streams for music’s 99%, slumped by about two-thirds in 2020, according to Bloomberg Intelligence analyst Amine Bensaid.
Given all of this gloom, where does Tidal fit in? The platform could at least fly the flag for a fairer division of the streaming spoils at a time when regulatory scrutiny is rising. More “user-centric†payment models, parceling out those $9.99 subscription fees according to individual tastes, deserve to be tested. Tidal cut a deal with digital distributor DistroKid allocating 10% of its premium $19.99 service to users’ most-listened-to artists.
Dorsey could also take a leaf out from the book of platforms like Kickstarter or Patreon — linchpins of the so-called “creator economy†— that allow artists to raise money directly from fans. Investing in do-it-yourself tools might attract more artists and improve their finances. Research by Page estimates that a creator’s revenue-per-hour from a stream on a music platform equates to around $0.01 per user, while on a Twitch live-stream it’s $0.15 per user.
A user-centric streaming model might only reshuffle elite revenues rather than revolutionise music, and subsistence farming on Patreon is still subsistence farming. Not everyone is going to adapt to a world inexorably headed towards financialising social interactions and a sense of belonging — an entry ticket to an infinite discotheque, as economist Jacques Attali once put it. The hype around overpriced and speculative NFTs has achieved little beyond enriching a murky elite and drawing the ire of Brian Eno.
—Bloomberg