Last week, Cash App announced Cash App Studios, a new program to bankroll artists and other creatives. It’s an invite-only initiative where artists maintain ownership and don’t have to pay back any funds.
Cash App’s advantage. The rumors of Cash App’s record label have been floating since last year. Back then, Cash App was winning with its hip-hop influencer strategy but its additional value-add to creators was less defined.
But now that Cash App creates hip-hop-related content and Twitter—which Square CEO Jack Dorsey also runs—has added more creator-centric tools, it makes more sense.
Cash App Studios would bring more artists in-house. The artists accepted in its program can use Cash App to facilitate payments from fans, use Square’s banking tools, Twitter’s new features, and release music on Tidal (more on this later).
It’s the creator-centric vision that Jack Dorsey has envisioned.
Cash App Studios’ grant-style funding implies that its terms would be artist-friendly. I strongly doubt that Cash App wants to get rich off of music asset ownership. In fact, Cash App Studios may run at a loss. This program is a customer acquisition strategy to attract users to more lucrative parts of its business. These artists will become Square business customers, and their fans will become Cash App users.
Integrating Tidal. Tidal is there for the Cash App Studios artists to use, but the massive reach of Spotify, YouTube, Apple Music, and Amazon is too big to expect anymore Tidal exclusives. Look at the superstar artists who once proudly had their music off Spotify. Most have since added it on.
But what if Tidal evolves? Both Jack Dorsey and Jay Z want an artist-centric platform. I could see Tidal pivoting to enable fans to subscribe directly to an artist, instead of the platform. Paid fans could get exclusive previews of music (e.g. Twitch, but with on-demand streaming built-in). Down the road, it can expand to NFTs, tokens, and other Web 3.0 related opportunities.
Compare the alternatives. Cash App’s offering is less like a traditional record label and more like the creator funds launched TikTok, Snapchat, LinkedIn, and others. Those companies have invested in attention. If talented creators build on their platforms, then the creator’s fans will use the platforms as well.
Most creator funds also coach creators on how to best use their platform. But Cash App Studios artists don’t need coaching on how to use Cash App (at least I hope not) These artists likely want coaching and guidance on how best to level up their artistic careers.
Will Cash App Studios offer its artists those resources? Does the company have the staff or expertise for this? If they do, will those staff members be empowered?
Apple Music’s tensions with Beats By Dre and Interscope Records founder Jimmy Iovine are a reminder of the culture clash that can exist when music execs are hired to run music units in tech companies. It can be an uphill battle for music execs, especially if their business unit is essentially content marketing for the company’s core product.
Will it work? Here’s what I wrote in July about Cash App’s future with artists:
“It’s an ambitious plan that’s a better fit for artists who see themselves more as creative brands and less as musicians. Meg Thee Stallion fits perfectly. I’ve written previously about how her primary metric of success shouldn’t be record sales.
Another good option is Saweetie. I wrote a few weeks ago about her $900 million goals and her Icy University YouTube series about how to boss up.”
If the money offered is higher than alternatives, it may attract some artists who would have otherwise stayed independent, signed with an indie or distributor, or only signed for a record label for the money.
Cash App Studios probably won’t lure in the artists who had their hearts set on becoming a major record label superstar. But in fairness, most alternative options aren’t luring those creators away (at least not yet).
Read more about Cash App Studios’ launch in Rolling Stone.