Earlier in January, Sir Lucian Grainge, Chairman and CEO of Universal Music Group, referenced (in a memo) a switch in the streaming service payment model for artistes and rightsholders; an “artiste-centric model.”

UMG recently announced an alliance with Tidal to find “an innovative new economic model for music streaming that might better reward the value provided by artists”. The partnership will set out to research how music services and platforms can “generate greater commercial value for every type of artist” by “harnessing fan engagement.” The research is intended to explore how different economic models “could accelerate subscriber growth, deepen retention, and better monetise fandom to the benefit of artists and the broader music community.”

Sir Grainge in his memo wrote that “[To] correct [the streaming payout]imbalance, we need an updated model.

“Not one that pits artists of one genre against artists of another or major label artists against indie or DIY artists. We need a model that supports all artists — DIY, indie and major.

“An innovative, ‘artist-centric’ model that values all subscribers and rewards the music they love. A model that will be a win for artists, fans, and labels alike, and, at the same time, also enhances the value proposition of the platforms themselves, accelerating subscriber growth, and better monetizing fandom.”

TIDAL Lead Jesse Dorogusker, said,  “From day one, TIDAL has stood out as artist-first, leading with a premium subscription tier to pay artists more and experimenting with new ideas like fan-centred royalties to see if there are fairer and more equitable ways to get artists paid.

“We are setting aside our current fan-centred royalties investigation to focus on this opportunity for more impact. We’re thrilled to partner and learn along the way about the possibilities for more innovative streaming economics.

“This partnership will enable us to rethink how we can sustainably improve royalties’ distribution for the breadth of artists on our platform.”

Michael Nash, UMG’s Executive Vice President, Chief Digital Officer, said: “As the digital landscape continues to evolve, it’s become increasingly clear that music streaming’s economic model needs innovation to ensure a vibrant and sustainable future.

Tidal’s embrace of this transformational opportunity is especially exciting because the music ecosystem can work better – for every type of artist and fan – but only through dedicated, thoughtful collaboration.

“Built on deeply held, shared principles about the value of artistry and the importance of the artist-fan relationship, this strategic initiative will explore how to enhance and advance the model in keeping with our collective objectives.”

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