Will ‘Tidal’ Drown In A Sea of Competition?
Good show, Jay Z! What a press conference. Bravo!
Remember when you brought your wife, Jack White, Daft Punk, Kanye, Nicki Minaj, Madonna and even your protégé J. Cole onstage with you? Then you had Chris Martin and that other white dude video in? So cool. As if that weren’t enough, you had Alicia Keys – Alicia Keys! – give a speech about how music should be owned and sold by the artists who make it.
I mean, wow. There was so much star-power on that stage, it’s almost as if you were using your celebrity friends as a decoy. It couldn’t have been that you were using them to mask the glaring flaw in your shiny new product, right?
Right.
You know what would have made a much bigger statement? If you had pulled 16 random men and women off the street and gave them each $50 to stand on stage with instruments. Maybe you could have peddled them as indie musicians. You know, the artists your new music platform “owned by artists” doesn’t include? No, no, that won’t do. Because ‘Tidal’ is owned by recognizable musicians who already rake in millions of dollars a year. Artists who own clothing lines, have major advertising deals and can sell out the world’s largest venues before you can refresh StubHub. Those 16 celebrities who were on stage for the press conference – “first-tier artists,” as Jay calls them – they will own the most equity in the company.
Where does that leave independent artists? How much equity will Tidal have left to offer when those 16 celebrities have taken their slices of the pie? If each first-tier artist owns 4% of Tidal, only 36% remains for “second-tier artists,” likely popular artists with powerhouse brands. And when users pay $20 every month ($240/year) for high fidelity (hi-fi) audio and exclusive content from artists, how much of that revenue will go back into Tidal? And how much will be paid out to the celebrities who took all the equity?
The real question is, how much pie will you have left to offer, Jay? Certainly not enough to hand out to artists who aren’t household names – the ones, talented or not, who are actually struggling to make a living.
At its core, Tidal is a great idea. There are a few perks: allow vendors access to data analytics is huge. Transparent economics is all the rage these days. Your artists will want to know how many users are streaming their music, where they’re streaming from and what device they’re streaming on. Having access to user demographics will be crucial when artists are promoting their product.
The “lossless” hi-fi quality audio isn’t so much a perk as it is a luxury. How many Spotify users do you know who complain about the free platform’s bit rate of 160kbps? Spotify’s premium stream is twice as strong and will eat up your mobile device’s data plan faster than you can press “skip.” Tidal offers hi-fi bit rates of 400kbps to 1,400kbps for those paying $20/month, and it’s $9.99/month for those who want, you know, regular quality audio. So if you want mobile hi-fi, you’d better have access to Wi-Fi (please sign me, Hov).
Let’s not forget, this shit ain’t free. Tidal will, in no way, dissuade the public from torrenting albums and singles online. Spotify’s premium rate is already half of what Tidal’s premium rate asks for. You’re a self-made businessman, Jay. Yet your product is already more expensive, half as strong and with such high music quality, inevitably streaming slower than the competition. You should know better.
The best thing Tidal can do for itself, if it really wants to make a statement to its competition, is have their equity-owning artists pull their music out of Spotify’s library. It makes sense from a capitalistic standpoint, but perhaps not so much from an enterprising one. It would be a risky move for Tidal’s first-tier artists. Let’s not forget, they’re still making money from Spotify. Calvin Harris, that “other white dude” who called into the conference with Chris Martin? Spotify put over $1.2 million in his pocket last year, all generated by the song “Summer” alone. Does Harris really want to sacrifice all that potential revenue? Competition is thick, and despite the trendy fact that Tidal is owned by artists, it’s not really separating itself. At least, not in any particularly good way.
“I just want to be an alternative,” Jay Z told the New York Times’ Ben Sisario in March. “They don’t have to lose for me to win.”
It’s sink or swim. We’ll see how long Tidal can wade in an ocean full of money-hungry sharks and music-craving pirates.