Artists joining Tidal, a new music streaming service, are playing a dangerous game. While megastars can afford to join because of their loyal fans and financial security, the concept of restricting some, or all, of their content to a single platform may end up doing them more harm than good. Musicians have been hemorrhagingprofits due to the paltry payouts of freemium models like Spotify while customers have been enjoying a renaissance of free music. Artists and their record labels are desperately looking for solutions to rebalance the industry so that artists will get paid fairly, but making listeners choose a group of artists on a single platform is not the answer. Listeners will be forced to choose between finding free routes — YouTube, free streaming services or
torrenting — or limiting their music choices based on the platform they choose. Such a scenario would not be good
If an artist’s music becomes too exclusive, they might lose fans and also music sales, merchandise sales and other forms of revenue — much more than they would lose by staying on Spotify. Only top musicians will be able to afford this course of action. Indie artists and huge stars alike cannot survive on a Spotify paycheck, but the stars can afford to experiment with different models at the risk of their sales. Indie artists cannot.
The music industry runs the risk of creating a rift between those who can afford to be experimental with new platforms and those who cannot. If an indie artist tries Tidal and the service is unpopular, they will make much less money than they would have if they were on Spotify. It is clear that free streaming does not compensate artists properly. The answer is not to divide artists between multiple platforms and make people choose. It would be great for the huge artists who will have Apple, Tidal and Spotify bidding for the rights to their music, but unsustainable for most
Artists have to be united. The most profitable path for the music industry would be to negotiate collectively. Customers may have to start paying for music again, but the streaming model does not have to end. There is a sweet spot in price that is estimated to be around $6, a price affordable for customers and profitable for artists. It would be better to have artists negotiate together than bidding for larger contracts and ultimately ruining the landscape.
The answer is not a licensing war. If one breaks out, everybody will lose.