A rash of subscription-only content platforms is cropping up to house influencer content. Here's what we learned from TIDAL.
Subscription services for content creators such as OnlyFans, Patreon, Wotch, Nubula, Floatplane and Boomday are springing up across the Internet. They are a reaction to, and protection against, the vagaries of social media platforms’ algorithms; a lack of control over AdSense rates; plus a safeguard to the changing whim of brands advertising partnership deals.
Whilst new for creators publishing content to YouTube, Instagram and TikTok we have been here before with another set of content creators - musicians.
In 2015, Jay-Z acquired the struggling music streaming service for $56.2 million. TIDAL attracted high-profile artists to take ownership positions in the platform and market to their fans paid subscription tiers for exclusive access to content and high-quality streaming.
Like today’s influencers, the musician backers of TIDAL were driven by similar frustrations: technology, lack of control and diminishing revenues.
Ultimately TIDAL failed to live up to its full potential. Last week it was acquired by Square - the cash-app company. Maybe tellingly Square shares a CEO with a social media platform. Jack Dorsey splits his time as CEO of both Square and Twitter.
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Why couldn’t TIDAL get more traction in the market? There are three reasons: The celebrity-backed music streaming platform faced allegations focused on artist compensation and inflated user numbers. It was outgunned by rival offerings: Spotify and Apple Music. Thirdly, it failed to exploit its competitive advantage - exclusive access.
TIDAL was founded by big-ticket musicians. Jay-Z, one of the world’s most successful rappers, publicly debuted TIDAL alongside a who’s who of music’s 16 biggest power players. The group represented the leading proponents of music’s most-liked genres. These artists included Arcade Fire, Beyoncé, Daft Punk, Madonna, Rihanna, and Kanye West. The platform had enormous clout and relevancy for the target audience.
TIDAL, however, failed to keep its nerve in preserving its content’s scarcity. TIDAL started off by offering unique access to its musicians’ content. By 2018 this competitive advantage was eroding. By 2019 it was lost.
Beyoncé and husband Jay-Z launched their joint album Lemonade in June 2018 exclusively on TIDAL. Just three days later, however, the album was available on both Apple Music and Spotify’s paid tier.
In 2019, Jay-Z seemed to reject TIDAL’s scarcity value proposition altogether. He offered his music catalogue, not to the streaming platform he fronted - but to its main competitor: Spotify.
Today's creators can learn from yesterday's TIDAL backers
Today’s content creators might learn from TIDAL’s recent past. By diversifying their content to include subscription services as well as maintaining audiences on mainstream platforms they are hedging their bets; spreading their risks. But, they are also in danger of diluting their proposition. Unless they can maintain a ready stream of additional, exclusive, content available only on subscription sites they’ll lose out on scarcity as a competitive advantage.
Conversely, these content creators and subscription platforms should keep an eye on how Square develops TIDAL.
Square is acquiring a majority ownership stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders, and JAY-Z joining the Square board. Why would a music streaming company and a financial services company join forces?!— jack (@jack) March 4, 2021
In a string of Tweets last week Twitter and Square’s joint CEO Jack Dorsey said: “Why would a music streaming company and a financial services company join forces?!
“It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers ...
“Square created ecosystems of tools for sellers & individuals, and we’ll do the same for artists. We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams”.
Past partnerships between Square’s Cash App’s and musicians have already helped integrate Square into urban culture. The financial services’ company could help influencers sell their own products including merch via Square's eCommerce arm - or help finance growth in their businesses.