Music streaming has become an integral part of the music industry, with platforms like Spotify and Apple Music leading the charge. However, the current economic model for music streaming has been the subject of much debate, with many artists and rightsholders feeling like they are not being fairly compensated for their work. Universal Music Group (UMG) and Tidal have announced a new partnership aimed at exploring an alternative economic model for music streaming that might better reward the value provided by artists.

The Need for an "Artist-Centric" Model

In a memo sent to UMG staff on January 11, Universal Music Group's Chairman and CEO, Sir Lucian Grainge, referenced UMG's preference for a switch to an "artist-centric" model to transform the way that artists and rightsholders are paid by streaming services. Sir Lucian believes that the current streaming payout model is imbalanced and needs to be updated. He wants a model that supports all artists, including DIY, indie, and major, and that values all subscribers and rewards the music they love.

Tidal's Commitment to Artist-First Philosophy

Tidal has always been an artist-first platform, with a premium subscription tier aimed at paying artists more. 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-centered royalties to see if there are fairer and more equitable ways to get artists paid."

The Partnership's Goals

UMG and Tidal will work together to research how, by "harnessing fan engagement," music services and platforms can "generate greater commercial value for every type of artist." Their research will extend to how different economic models "could accelerate subscriber growth, deepen retention, and better monetize fandom to the benefit of artists and the broader music community."

The partnership aims to sustainably improve royalty distribution for the breadth of artists on Tidal's platform. 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.

The Future of Music Streaming

As the digital landscape continues to evolve, it's becoming increasingly clear that music streaming's economic model needs innovation to ensure a vibrant and sustainable future. 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."

This new partnership between UMG and Tidal could lead to a more equitable and sustainable future for the music industry. The music streaming industry has the potential to support artists and reward fans for their love of music. With the help of this new partnership, the music industry can move towards a more artist-centric model that benefits everyone involved. 

Arkatech Beatz (Jugrnaut & Mike “Trauma” D) are a Grammy nominated music production team from New York now based in Atlanta. They were affiliated with Loud Records/Sony Music Entertainment as A&R’s and have produced for artists such as Big Pun, Nas, Raekwon, Jadakiss, Prodigy of Mobb Deep,The Game, Waka Flocka Flame, Freddie Gibbs, Killer Mike, Mýa, Max B and others. They are the host of The Arkatech Beatz Music Business Podcast.  Arkatech Beatz are also authors of The Songwriter's Guide To Song Registration .