Beyoncé's Streaming Strategy, Explained

Netflix, Tidal, and Spotify all serve different roles in Queen Bey’s strategic plan.

A lot of people were surprised that Beyoncé’s Homecoming documentary went to Netflix. After all, the 37-year-old singer is still a part-owner of Tidal, the exclusive home to Lemonade. Others were also surprised that Homecoming: The Live Album is widely available and not a Tidal exclusive.

The timing is ironic since Tidal has invested heavily in video content. A few weeks ago it live-streamed J. Cole’s Dreamville Fest, and last month it got the rights to stream the hood favorite, Paid In Full. Homecoming would have fit right in.

Despite her ownership stake in Tidal, the “Formation” singer chose Netflix because it falls in line with her broader strategy. Her most recent projects— the Homecoming documentary, The Live Album, Everything Is Love, and Lemonade — all serve different roles. In each case, the choice in streaming services let her segment the Beyhive and maximizes revenue. These moves inform what we should expect from her next album.

Netflix has the bag and the audience

The Homecoming deal terms are not public, but if Ricky Gervais got $20 million for each of his Netflix comedy specials, Bey definitely got more. And after Netflix lowballed Mo’Nique, the last thing it wants to do is short-change another black woman who, you know, happens to be this generation’s most powerful entertainer.

Beyoncé’s 2013 documentary Life Is But A Dream was released on HBO in 2013. But back then, Netflix was a far less powerful player. Today, the streaming behemoth consistently offers stars eight-figure deals because it’s in aggressive growth mode. It subsidizes its monthly subscription costs to prioritize customer acquisition. Subscribers stay for the massive amount of content. Bad content gets cut, but the top content gets heavily promoted to further drive growth. That’s why Netflix dropped $25 million to try and help Roma win the Best Picture Oscar.

And that’s why Bey likely got paid whatever she asked for. Let’s assume Netflix paid $30 million total to produce and market Homecoming. According to the Financial Times, Netflix’s customer lifetime value is just under $200. A 3:1 ratio of ‘lifetime value’ to ‘customer acquisition cost’ is a common target in tech. If Netflix wants Homecoming to meet that, the documentary needs to bring in (or maintain) 450,000 subscribers to justify the $30 million it spent. That’s a relatively small number for a service that has 140 million subscribers and grew 9 million in the first quarter of 2019.

Netflix’s 140 million subscribers (and the millions more y’all who log in with your friend’s cousin’s account) are another reason why Beyoncé chose Netflix. It’s a great way to reach casual fans.

If the documentary resonates with this casual audience, they will move further through Beyoncé’s sales funnel. They will be more willing to attend her next concert, buy Ivy Park merchandise, and subscribe to Tidal. Beyoncé would have lost out on the opportunity to convert casual fans if Homecoming was exclusively on Tidal—which serves an audience that’s already bought in.

But the diehard Beyhive fans weren’t alienated. Most have Netflix accounts. And plus, many of them had live-streamed (or attended) Beychella and read last year’s Vogue interview where Bey opened up about her difficult pregnancy. For the Beyhive, Homecoming was not a learning experience—it was a reminder of why they stan.

The Beyonce sales funnel. Three distinct stages and the content consumed at each stage:

Beyoncé cares more about Spotify than you think

On Everything is Love, Beyoncé told us how she really felt about streaming numbers. “If I gave two fucks about streaming numbers, would have put Lemonade up on Spotify.”

Note, she gave two fucks about ‘streaming’ numbers. She said nothing about ‘subscriber’ numbers. Spotify currently has over 200 million on its free and paid tiers combined. Everything Is Love and Homecoming: The Live Album are on Spotify for the same reason Homecoming is on Netflix. It’s a gateway to the casual audience.

But Everything Is Love didn’t start this way. Last June, it had one of the oddest rolloutsof any recent Beyoncé project. Its Tidal exclusivity lasted less than 48 hours. It soon became widely available elsewhere. The hybrid approach was likely done to give the Carters most loyal fans early access and still maximize reach with the general public. But most fans didn’t follow that logic.

The limited transparency is nothing new. Bey and her Parkwood Entertainment team have thrived on secrecy—dating back to surprise releases of Beyoncé (2013) and Lemonade. It’s an endearing aspect of her brand that fans generally appreciate. But Everything Is Love is one of the few instances where the post-release rollout led to more confusion than praise.

Tidal will still be home for the diehard fans

I predict that the next Beyoncé album will be a Tidal exclusive. After watching Homecoming, more of those casual fans will sign up for Tidal when the album drops. Others may get annoyed, but will at least do a 30-day trial to be included in the pop culture zeitgeist.

To date, Tidal’s business model has served Beyoncé well. She gets paid nearly double what Spotify and other services pay artists per stream. The Beyhive has streamed Lemonade more times than it can count. Those streams add up (unlike a documentary, which is revisited far less often). And since Beyoncé is a part-owner in Tidal, her team should have access to its valuable data on subscriber listening habits.

The decision to release on Tidal will also reinforce Beyoncé’s ownership stake. A large portion of subscribers are there for Bey and are holding out for this next album.

There are some understandable reservations that Beyoncé and her Parkwood team might have with Tidal. Since last year, the service has been under investigation for massively inflating Beyonce’s streaming numbers. Also, the streaming landscape has evolved considerably since Lemonade dropped in April 2016. Back then, exclusives were the industry move. But if Beyoncé was truly done with Tidal, she would have sold her stake and made Lemonade available on all platforms.

It’s rare for a megastar to succeed at both the macro and micro levels as Beyoncé has. It’s also rare that an artist can have streaming services work for her, and not the other way around.

Tidal may not have started as a segmentation tool for Beyoncé, but it ultimately became one. At the moment, current subscribers might be annoyed that Homecoming and its live album weren’t exclusive theirs. But they shouldn’t worry. The album they really want should be on its way.