UPDATED: This article has been updated to note that the limited interruptions are TIDAL led and will educate consumers on the music industry. The free tier is not ad-supported, like other freemium streaming services (e.g., Spotify, Pandora).
Last week, streaming music subscription service TIDAL broke its premium-only mold by adding a free streaming music tier for music lovers in the United States. Listeners can access TIDAL’s entire music catalog of more than 80 million songs, 350,000 videos and curated playlists for free with limited ads. This new free tier complements two existing premium HiFi tiers available in 61 international markets. Though the free tier is only available in the U.S. right now, TIDAL plans to expand to other markets in the future.
“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,” said Jesse Dorogusker, head of TIDAL, in last Wednesday’s announcement. “TIDAL is also supporting artists with 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, and we’re excited to collaborate with artists to evolve our tools to help them continue to grow and create on their own terms.”
Three tiers
With the addition of the free tier, music fans can now choose from three different tiers:
- TIDAL Free: Listeners get complete access to TIDAL catalog of songs, videos and playlists with limited interruptions. Per TIDAL’s PR agency, Mike Worldwide, the interruptions are TIDAL led and not from advertisers. TIDAL will use the interruptions to educate consumers on the music industry.
- TIDAL HiFi: After a 30-day free trial, for $9.99 a month, TIDAL subscribers get ad-free access to TIDAL’s HiFi sound quality, online and off. They can also utilize features like TIDAL Connect and My Activity, so people can track and share their daily listening habits.
- TIDAL HiFi Plus: A pricier plan at $19.99 a month, after a 30-day free trial, this subscription tier offers TIDAL subscribers all the bells and whistles, including best-in-class immersive sound formats (Dolby Atmos Music and Sony 30 Audio Recordings) and Master Quality Authenticated (MQA), plus early access to exclusive offers and new features. Up to 10% of subscriber fees in this tier will be paid to the artists that subscribers listen to most often.
TIDAL also offers a family plan for up to five users at $14.99 a month, and discounted plans for students (50% off), military and first responders (40% off).
New revenue features
TIDAL’s mission is to provide a sustainable business model for the music industry that supports artists in a sustainable way, while also providing a fan-centric experience. To make that mission a reality, TIDAL announced new ways for artists to get paid based on how much fans stream their work. Two of the new transparent revenue features include:
- Direct-to-artist payments: Last week, TIDAL launched monthly direct-to-artist payments to give artists an additional revenue stream. Through this new feature, artists will receive a percentage of membership fees paid by HiFi Plus subscribers, based on the subscribers’ top streamed artists. This supplements streaming royalties paid to artists and is not intended to replace them.
- Fan-centered royalties: Next year, TIDAL from HiFi Plus subscribers will not be aggregated. Instead, royalties will be paid to artists based on the actual streaming activity of individual HiFi Plus subscribers.
“Royalties will be paid based on the actual streaming activity of individual HiFi Plus subscribers as opposed to the industry accepted method of aggregating streams, empowering fans to play a larger role in the success of their favorite artists,” said Dorogusker.
To receive direct artist payouts, artists must opt-in using TIDAL’s invitation-only direct registration feature or through a TIDAL distribution partner. Over time, TIDAL will continue to expand the program to more artists. Payouts to artists are made through Square, Cash App and PayPal.
Insider Take
Earlier this year, Square purchased a major ownership stake in TIDAL in a $297 million cash and stock deal from rapper Jay-Z, Beyoncé, Madonna, Rihanna and other artists. As part of the deal, Jay-Z joined Square’s board of directors. Square hardware lead Dorogusker was named interim lead at the time of the deal, and changes were bound to follow. These changes are great for TIDAL, music and video artists, and for music lovers and TIDAL subscribers.
With a free tier, TIDAL can potentially expand its subscriber base if free listeners convert into paying subscribers. And, of course, the music industry will love the shift in how royalties are paid, because artists have long argued that how they are paid for their work by streaming services is woefully inadequate.
