Taylor Swift removed her entire music catalogue from Spotify.  A few months later, Jay-Z bought a Swedish music streaming service for $56 million. If streaming services and record companies didn’t rush to the war room, it wasn’t for lack of notice. Clearly change was coming.

On Monday, Jay-Z announced the launch of Tidal, the first artist-owned music streaming service. Jay-Z’s involvement alone is enough to make major waves in the music industry. But once you realize that Taylor Swift has given most of her catalogue to Tidal and that names such as Beyoncé, Nicki Minaj, Madonna, Kanye West, and Daft Punk are backing the project, it becomes clear that this is more than a wave. It’s a tsunami.

Since the advent of services such as Google Play and Spotify, there has been much contention concerning artists’ compensation and music streaming. When music is created, there is a copyright in the musical work and another in the musical performance that is recorded. The owners of those copyrights have the exclusive right to reproduce, distribute, perform, and display the work. Accordingly, in order to play songs, streaming services need to get a mechanical license for the musical work and a public performance license for the sound recording. The mechanical license is issued on a song-by-song basis, but due to the efforts of Publisher Rights Organizations (PROs), performance rights are granted to cover any of the music in the PRO’s catalogue. The fee for each license varies, but suffice it to say, songwriters and artists are getting fractions of pennies while record labels make a killing.

In the digital marketplace, record labels don’t have the role they once had in more traditional music mediums. At $10-$20 per month, where other services are free to $10 per month, Tidal endeavors to put more money in artists’ pockets. Not only by charging consumers more for the pleasure of listening to music in high-quality sound, but also by giving artists an equity stake in Tidal. Whether Tidal will become a viable alternative remains to be seen. Tidal may only be an option for music’s most powerful and popular. A large number of artists do not control their distribution rights. Those rights are controlled by record companies, so many songs may never make it into Tidal’s catalogue.

Despite some potential shortcomings, Tidal’s launch is sure to have ripple effects. Music technology is continuously changing. Perhaps it’s also time for a change in the outdated laws that complicate the fee structure for streaming services. Under the current system, consumers and record companies have been the biggest winners. Now that artists have banded together to take control, it will be interesting to see which stakeholders will wipe out trying to catch the next wave.

Samara Shepherd

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3 Responses to Artists Unite to Turn the Tide in Music Streaming

  1. Allison Laubach says:

    This represents a really big shift of power in the music industry. Now that artists are clearly working together to get their fair share of earnings, I wonder if we will also see them also join forces to fight copyright infringement outright?

  2. Danielle Dudding says:

    This is an extremely interesting development in music streaming – the popularity of Spotify is well-known, and its social media connections make it extremely popular. I wonder if the launch of Tidal will cause other artists to follow Taylor Swift and pull their music from popular streaming cites too.

  3. Kelsey Zottnick says:

    I did not realize that Taylor Swift had agreed to contribute her music catalog to Tidal. Given her highly publicized exit from Spotify, her move to this alternative streaming service sends a huge signal to stakeholders. I agree that at the very least, whether it falters or succeeds, Tidal will be a signpost for the streaming-music industry. And as you point out, Samara, it seems the initial head start Tidal has, with its cluster of highly visible artists, will only provide temporary momentum. Sounds like Tidal’s legal team is going to need some wizardry to extract other significant artists from their current distribution deals if it wants to stay relevant! It will very a fascinating public battle to watch!

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