Will Square’s $297M Tidal Acquisition Change How Music Creators Are Paid?

Also: Top Clubhouse creators ‘unionise’, Soundcloud’s new fan-powered monetisation model, the creator economy’s LA exodus, and more

Guest Takeover: Nathan took some well-deserved time off, so we invited Mario Gabriele from The Generalist to take his seat for the week! Mario was an active investor before he founded The Generalist—a community of 28,000 entrepreneurs, investors, and creators who receive weekly insights on the latest trends in business and tech. We’re so excited to get to share his brain with you this week.

If you like these takeovers let us know in the feedback and we’ll do more in the future!

Recommended Reading: Dan spoke to popular YouTuber Matt D’Avella about content creation, audience building, productivity, and burnout in this week’s Superorganizers

And now, onto the news…

Top Stories in the Passion Economy, 03/11/21

Square Acquires Tidal for $297M To Change How Music Creators are Paid

What Happened?

  • Square, the mobile payments company run by Jack Dorsey is acquiring Tidal, a music streaming service owned by Jay-Z, and other artists including Beyoncé and Rihanna. Details are hazy, but Jack says he wants to use Square’s technology to explore new monetisation models for music creators.
  • The acquisition is valued at $297 million and Jay-Z is set to join Square’s board. Jay-Z bought Tidal in 2015 for $56 million. 

What this means: 


  • Square’s payment infrastructure could be paired with Tidal’s extensive music catalog and artists relationships to set up new monetisation models for creators. 
  • However, I am surprised that this is a worthwhile focus for Square. I think it's a great branding move but I don't get the business use case for it at this point.


  • They're definitely not acquiring Tidal for their user base. Their numbers are quite low compared to Spotify and Apple Music. 
  • Square is planning to create an ecosystem of payment tools for artists—in the same way they’ve already built one for small businesses and individuals. 
  • But there is a big difference between small businesses and artists. There is a very long tail of small businesses—millions and millions of individual merchants who are doing daily transactions—but the same cannot be said for the artist and music world. Here, only a few artists actually make any significant amount of money. Strategically, this feels like a shift in the type of customers that they're serving.


  • Jack’s tweetstorm makes it sound like they’re trying to create a Patreon-style service. But that opportunity is just not big enough (yet) for a $100 billion market cap company like Square to care about. 


  • Yes, but direct creator monetization is tricky in the music industry because of the fragmented copyrights. You have the composition (owned by the songwriter and/or their publisher) and the sound recording (owned by the artist and/or their label)


  • True, if most music creators don’t own their IP, Square’s monetization model ultimately benefits copyright holders i.e. record labels and not independent music creators. 
  • It’s possible that the big opportunity Square is thinking about is using Tidal’s artist relationships for ticketing—which presumably wouldn’t run into as many IP issues. 


  • This could also be their foray into artists loans and providing capital to creators. But extending creator loans at scale in a hits-driven music business is precarious. Maybe they could use Tidal’s music consumption data to make those loans safer to underwrite.
  • Yes, they're planning to help music creators monetize through ancillary revenue streams like merchandise rather than music streaming itself. 
  • But even if they do this, the labels are still going to get a cut. Many musicians have 360 deals  that stipulate the labels get a share of all revenue streams, including merch and ticketing. 

Top 40 Clubhouse Creators Form a Quasi-Union 

What Happened?

  • Taylor Lorenz covered the recent formation of Audio Collective, a community of 40 popular Clubhouse creators who are planning to offer event planning, consulting, and support for brands who are building a presence on the platform.
  • The founders plan to build on Clubhouse’s Creator Pilot Program and lobby for better content moderation policies, data insights, and monetization features. 

What this means:


  • Audio Collective sounds like part-union part-Type House. A community for emotional support, content creation tips, etc. but also lobbying for better moderation policies, data insights, and monetisation features. 


  • What do you think is missing in terms of moderation? Because hosts can now boot people who are disruptive. 


  • Currently, when you call people up on stage for a question you have no idea what they're going to ask. I think that's why Josh Constine has been using a side chat room for the rooms he hosts. Creators want high quality participants, but right now it's a crapshoot when they call someone onstage. 


  • Clubhouse also really needs an analytics dashboard. Creators don't really know why certain conversations pull in more listeners and some don’t. Was there another really awesome room? Is it because the title was bad? Is it because the timing was inconvenient? 


  • Yeah, I agree! 
  • It's also interesting how quickly this happened: Clubhouse has only been around for a year and yet creators have decided that they're going to band together and create this quasi-union. This took years on other UGC platforms. 
  • It's partially driven by the creator economy zeitgeist and how creators are at the forefront of what platforms pay attention to now. This is underscored by Clubhouse's messaging around creator monetisation for their Creator Pilot Program. I think it has created awareness among popular Clubhouse creators that they should be engaged in the decisions that the platform makes and should actively participate in these conversations.


  • It's great for Clubhouse to have these proactive communities of top creators. They’ll help attract...
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