Music-Service Skips Record Labels, Pays Artists Directly to Convert Their Fans into Subscribers

October 10, 2012 by
Filed under: Announcements & Events, Entertainment Industry 

Rdio, the music-streaming service which has been a good challenger to Spotify, is adopting a new (and daring) business model. The company has recently announced its decision to offer revenue to musicians based on each individual fan on the website.

Through this project, called the “Artist Program”, artists will receive $10 for every new fan that subscribes to the Rdio service via a social media channel. The new concept, likely to appeal to musicians quite a bit, may put Rdio ahead of its competitors which so far have one single way of doing things – going to record labels and trying to make a deal with them over the artists’ royalties.

Currently, Rdio premium members pay $10 per month to access the service’s music catalog. With the new model, the service will practically make a unique payment of $10 per new fan to artists, so this could actually have some glorious future.

The key source of inspiration for the program might have been the artists themselves – namely, those artists who are enormously popular on the major social networking sites Facebook and Twitter. Rdio has seen the potential of turning their followers into Rdio subscribers with artists also benefiting from practically being paid by their fans. Pretty cleverish, huh?

Some artists like Snoop Dogg (pardon me, he recently upgraded himself to Snoop Lion),The Scissor Sisters and Brendan Benson of The Raconteurs have already joined the model.

I bet somewhere, there, in the Magic MoneyLand populated with everlasting record labels, some are getting for the first time a token of their possible…mortality.

In his statement, Janus Friis, Rdio’s founder said the C-word, so despised by the music industry: “There is no art without artists. As part of this industry, we know a business that doesn’t reward its most important contributors is a business that has to change.”

If you have any thoughts about how this strategy will work out for Rdio but especially for artists and how music fans will receive the new model, don’t be shy and post them in the comments.

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