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Digital
Rdio considering incentivising artists to sign up new users
By CMU Editorial | Published on Friday 25 May 2012
Expanding digital music service Rdio is apparently plotting a strategy to directly pay artists who bring new subscribers to the streaming platform.
Quite how the system would work isn’t clear, but presumably signed up acts would be incentivised to encourage their fans to listen to their music via Rdio, which is only available via a subscription after a six day free trial. One manager told Billboard artists could be paid about $10 per new subscriber, which would eat up each new customer’s first month or two months of expenditure (depending on which package they opt for).
Some reckon many artists would react positively to the scheme, given that many acts and managers feel they are not profiting enough from the recent boom in streaming platforms, either because labels have agreed to too low a royalty or because they aren’t passing enough of the royalties onto artists, or both. By cutting out labels, publishers and collecting societies, this way artists could also profit from the rise in streaming.
That said, such an arrangement would likely be short lived, and bigger artists would possibly see it as an endorsement deal, for which upfront fees would usually be expected. And while many smaller and middle-sized bands might still sign up, some wonder whether the artist-introduction scheme would sufficiently deliver for Rdio without some big names involved too.
Rdio, of course, is in an increasingly competitive market place as Deezer and Spotify also pursue rapid expansion plans around the world, competing with more established home-grown services in some territories. Whether incentivised artist tie-ups could be a clever way to gain some ground on the competition remains to be seen – it will also be interesting to see if any labels claim their artist contracts prevent acts from entering into these sorts of deals without cutting the record company in, given it’s the label-owned content that is really attracting the customer.