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Beyond the Hype – Will All Musicians Benefit from Jay-Z’s TIDAL?

Monday Jay-Z’s newly acquired TIDAL streaming music service pulled back the curtain on its relaunch, but just a little bit. As predicted, TIDAL is adding a compressed music service, competing with the likes of Spotify, to accompany its lossless CD-quality HiFi service. The compressed service is $9.99 a month, while the lossless version is double that, at $19.99 a month.

Still a bit hazy is TIDAL’s plan to share a majority of the company’s ownership shares with music artist partners. Sixteen popular artists appeared at the launch event in New York City–including Alicia Keys, Daft Punk, Kanye West, Jack White and Madonna–to sign a “declaration,” the details of which remain unspecified. According to anonymous executives with knowledge of negotiations cited by The New York Times, participating artists will provide content that will be exclusive to TIDAL.

While multi-platinum and Grammy-winning artists may indeed be getting better deals from TIDAL than its competitors, it remains to be seen what is in store for the average recording and touring musician, if anything. As I mentioned in my analysis last week, many artists point their finger at record labels as being at least partly responsible for paltry royalties they receive from streaming services. Even most of the artists partnering with TIDAL at this debut are signed to labels that will need to be in on whatever deal the company wants to cut. That means TIDAL can’t necessarily improve the royalties situation unilaterally.

The question remains, will the average touring band on a major or large indie label have the opportunity for better royalties with TIDAL than they do with Spotify, Rhapsody or Rdio? Will labels agree in exchange for better royalties to provide exclusive content from an artist that sells tens of thousands of albums the same way they will for the artist who moves hundreds of thousands, or millions? Will those higher royalties even get passed on to artists?

No doubt TIDAL’s relaunch and alliance with major artists stirs things up even more in the streaming music world. Yet, it’s arguable that Spotify got to the number one spot by virtue of the free ad-supported service that artists decry but listeners seem to like. Without that free tier, will TIDAL attract enough fans based upon the feel-good promises of being artist-friendly combined with some unspecified number of exclusive tracks? Part of me would like to think so, but that’s a yet unsubstantiated hope, not based on evidence.

One possible outcome is that TIDAL will spark up a cozier relationship to one of the major label conglomerates, perhaps taking an equity stake. For anyone concerned about the welfare of artists who aren’t superstars this probably isn’t the most desirable outcome.

A more desirable one might be the evolution of an artists’ streaming co-op, where every participating musician has the chance to own a stake and a vote in how the company manages its business. That’s probably a bit too fantastic, too.

The new compressed TIDAL Premium service is available now, as is the lossless HiFi service. My test of TIDAL HiFi shows that the improvement in fidelity is real, but requires good quality listening equipment to be worth it. I hope to take the Premium service for a spin, too, in order to see how it measures up to competitors and the HiFi tier.

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