Tidal, the music streaming service made famous when it was bought in 2015 for 56 million dollars by Jay-Z together with superstars like Rihanna, Kanye West and Beyonce, was acquired last year by Block (previously known as: Square).
For those not familiar with the company, Block is a fintech company that created an ecosystem of solutions for businesses from point of sale devices with Square to peer-to-peer payments through its Cash App and buy-now-pay-later services with Afterpay.
For most, the synergies between a financial services company and a music streaming platform might be close to zero. Yet, the CEO of Block is Jack Dorsey a known advocate of blockchain technology, the technology that is supporting the growth of NFTs that we are seeing in the music industry. This suggests that Tidal might be a Trojan Horse to introduce the technology to the mainstream and in turn become a revolutionizing platform for all musicians.
Tidal has taken a huge step towards becoming one of the most artist-friendly streaming services after it announced that it will be changing its royalty payment system to a Fan Centered one. This model pays artists based on how much each user is listening to them, compared to the model used by the likes of Spotify which aggregates streams and then distributes them based on the aggregate total of streams. The graph below is taken from Tidal and it explains the new system in detail:
In addition to this, they have added a direct payment method for artists which makes the process much quicker for all musicians compared to the current situation in other platforms.
These two new features make the platform much more artist friendly and users can have a more direct impact in the career of an artist they love. However, with blockchain technology, Block’s platform of financial services and significant firepower in terms of cash to experiment, we expect the Tidal platform to turn to a lot more than this.
First of all, Tidal can go to the next step in Fan Centered Royalties model implementing tokens and smart contracts so that artists can be getting paid instantly when a fan listens to one of their songs in a transparent way. This has the potential to excite a growing niche of the industry which is blockchain enthusiast musicians and directly compete with alternative streaming services targeting this niche such as Audius.
Furthermore, it could incorporate in the platform direct sales of NFT products from artists and a secondary marketplace to provide liquidity for both musicians and fans. One could imagine artists auctioning song rights as NFTs directly on Tidal which could also bring “member” perks directly in the platform such as exclusive songs, stories and messages. Fans would be able to then buy and sell these NFTs directly on platform to other users of Tidal. There could also be a great potential of cross selling the streaming service to the users of the NFT marketplace.
Another possibility could be the Decentralized Financing of musicians. The Opulous platform that is being developed by the CEO and founder of Ditto Music, a song distributor, will allow musicians to borrow money against their song royalties from a large range of possible investors. Square, a Block subsidiary, is offering already normal loans to small businesses; meaning that the company has an experience in the matter and can eventually extend it out to financing musicians through DeFi.
Block could develop many of the possibilities without acquiring Tidal or using the blockchain technology. So why are we predicting this?
The acquisition of Tidal gives Block a direct relation to thousands of artists, while Jack Dorsey with Jay-Z have endorsed the technology and cryptocurrencies on many occasions, indicating that if they are serious about its widespread adoption, a service like Tidal could be the perfect experimental platform.
Who do you think will be the Music NFT star player? Will a company like Royal (a marketplace where you can purchase song rights in NFT form) that has raised 60 million dollars in under a year have better chances? Or is it another player? Or maybe a player we have not even heard of yet? We would also love to see the most interesting music and blockchain related projects that you know.