Will The Creator Economy Get Jacked?
How The Twitter CEO's Great Resignation Could Affect Musicians
Like him or not, Jack Dorsey has always been the rockstar in his class of tech titans. Of course, the Kraftwerkian robot facade of Mark Zuckerberg and Jeff Bezos’ incel Moby vibes meant there wasn’t much competition for this title. But if Steve Jobs was Silicon Valley’s John Lennon—ambitious, exploring, prickly, seismic—then that must make Jack (for the purposes of this analogy only) more like Joe Strummer. A seeker whose well-meaning tendencies left room for plenty of ambivalence about the punk rock he wrought.
Dorsey has often called himself punk and has the teenage photo with blue spiked hair to prove. You could even call Twitter his London Calling in that it is endlessly talked about in the press, but didn’t really sell that many copies.
In music, there is often a gap between influence and popularity. The same can be said for tech. And while Twitter will inevitably be the lead in Jack’s obituary, the app’s impact might actually pale compared to his other company, Square.
If you don’t hear that much about Square, it’s because it hasn’t aided in the decline of liberal democracy (yet). But the payment system has quietly become a major player in the creator economy by allowing individuals to accept credit cards. This isn’t limited to music, obviously. A recent report by Square, Indexing the Creator Economy, fails to even mention music when discussing the creator explosion (up a whopping 48% year-over-year). But that didn’t stop the comms team from using a thumbnail on the embedded video showing a woman in an Etsy-approved plaid blouse strumming an acoustic guitar because, well, it looks more serious than a still photo of a young male with purposefully disheveled hair doing a TikTok dance.
But ultimately, who cares if music plays an outsized role in the image of the creator economy while lagging behind in revenue. An article on Water & Music last month reported that “while the number of audio creators on Spotify roughly doubled from 2018 to 2021, the overall number of creators using Stripe grew by 8x over the same time period.” That’s still double the music creators.
Another meaningful number might be Square’s claim that the total amount of creator revenue will soon surpass $10B. It’s unclear what percentage of that is music-related, but we can assume that it doesn’t include the $1.2B in artist-direct revenue generated by recorded music in 2020. But for simplicity’s sake, let’s mandate that going forward, only one out of every ten images of a creator used by the media can be of a musician.
So what does this have to do with Jack, specifically, now that he’s resigned from Twitter? It’s unclear. When Square bought Tidal back in March, there was a lot of speculation as to what that might mean for the ailing DSP which, despite high-profile lead investor Jay-Z, lags far behind Spotify, Apple Music and Amazon Music in adoption [even though one half of The Cadence uses the service daily].
In a joint interview with Jay-Z in June, Jack vaguely promised “new listening experiences” in Tidal’s future. The detail of these experiences remains TBA, but last week Tidal made some moves towards gaining market share when it announced a free tier with no ads. At the same time, it implemented “fan-centered royalties” and “direct artist payouts” for its premium HiFi Plus tier. This apparently means two different ways in which artists’ revenue will more directly reflect what customers who will pay $19.99 per month actually listen to, compared to the pro-rata aggregation of funds used by a majority of the streaming industry (including Tidal’s $9.99 customers).
The idea of charging consumers double for the privilege of paying artists more fairly might seem cynical. But considering that despite their industry dominance, there are no streaming services that operate with a profitable business model, it’s becoming abundantly clear that listeners will need to meet the platforms halfway if anyone other than the major labels is to be able to cash in.
Of course, there are people who will tell you that user-centric payments in streaming will actually direct more funds towards the top 1% who already make a majority of the money. But given the fact that Soundcloud’s own experiment in “fan-powered” royalties increased Portishead’s payout on an exclusive cover of ABBA by more than 500%, supporters of pro-rata are starting to look like climate-change deniers.
So will Jack, free from the daily headache of trying to make Twitter less of a hellscape, now dive into the creator economy and come up with a solution for a more fair streaming service and other new creator revenue streams (powered by Square)?
Maybe now that Jack has quit his main gig, his side hustle can really bloom. Just like the corporate workers bailing on their 9-to-5 in the Great Resignation to become the very creators Jack hopes to empower.
Then again, Twitter remains the only major social media platform accused by lawmakers of copyright infringement because it lacks any sort of blanket music licensing deal. So you’ll have to (blue) check back with us to see how this whole supporting musicians thing plays out.
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TAKEAWAYS
Salient statements from this week’s music news.
1. Record Labels Really, Really Don’t Like a New Bill That Could – Eventually – Change How Artists Get Paid in the UK
Major legislation introduced in Parliament includes 50/50 royalty splits between artists and labels for streaming, in addition to provisions to make it easier for artists to renegotiate deals made prior to the digital music economy.
Takeaway: Record companies, both majors and indies, are up in arms over suggestions from a British politician that signed artists should see a portion of their UK streaming royalties bypass the label system entirely, and be paid to performers directly via a collection society.
2. Spotify Retires Car View in Favor of Car Thing — People Are Pissed
Can anyone explain Spotify’s hardware play? Anyone?
Takeaway: So you know, the feature you’ve been using for the best in-car listening experience is gone. Now you can fork over $79.99 for the same interface – on a Bluetooth device mounted to your dash.
3. The Prince Symbol Has Been Salvaged From a 1993 Floppy Disk
Minneapolis’ hottest new club is Ƭ̵̬̊. It has everything. $100M major label contracts, arcane MacOS font formats, and an unpronounceable gender-fluid glyph.
Takeaway: There was immediate confusion, not to mention considerable derision, as to how he would be referred to in the future, prompting Warner Bros. to send out computer floppy discs of the symbol so publications could use it in print.
