What’s Wrong With Jay Z’s Tidal Streaming Music Service Plan

Tidal Streaming Service Problems
Kevin Mazur/Getty Images

Now let me get this straight … piracy can be eradicated if artists just band together in the name of money?

That’s what Tidal is all about, cash: for the misguided artists who believe this latest subscription streaming service is their financial savior, but primarily for Jay Z, who used OPM (other people’s money) to buy the service recently for $56 million, with an eye on a big score.

But things don’t happen that way. Did Jay call PayPal co-founder Peter Thiel? If he did, he would have learned to go where there’s no competition. That’s how you win in the tech space. But Spotify’s got traction, Apple has a ton of cash, and Deezer and Rdio are players. If you think Tidal’s gonna walk right in and get huge market share, you probably believed iTunes Radio was gonna neuter Pandora. Hell, even Jimmy Iovine couldn’t neuter Spotify. Beats Music was a disaster in its initial incarnation. Give Jimmy credit for selling the enterprise to Apple, but without the profit-making headphones, there wouldn’t have been billions involved.

Spotify was successful because of the deep pockets of its owners, who were willing to lose on the way to winning. Beats Music did not have these deep pockets, and Tidal certainly does not, unless artists are all willing to kick in double-digit millions to turn the tide.

That’s what a venture capitalist does. To see Jay Z try to triumph in tech is like watching WME and CAA throw cash at investments/incubated projects. These are not their areas of expertise.

First and foremost, you’ve got to pay for Tidal. And therefore it’s dead on arrival. Just like Apple’s new music service. Because people love their money more than their favorite artists. And the kind of person who pledges devotion to Tidal artists — including Kanye West, Rihanna, Madonna, Jack White, Alicia Keys, J. Cole, Nicki Minaj and Daft Punk — is the kind who’s waiting for his parents to put cash on his debit card. Now if Tidal had a free tier … but it doesn’t. It can’t afford to lose that much money; it’s not about the long haul. Neither is the position of the artists on the stage. I’d be much more impressed if they all ankled their deals, got rid of the major labels and went it alone. That’s why they’re not making much money on Spotify — not because of the free tier, but because their deals suck. But these same deals apply on Tidal. They’ve got to license the music from their bosses. It’s utterly laughable, like nursery school kids plotting against the teacher.

Sure, if you loaded Tidal with exclusive content, it would be attractive. But the iTunes Store wouldn’t promote your new release. That’s where your money is today. And what about future artists? How do they get a share of the pie?

Let’s say a new Hozier comes along, and Spotify outbids you; they certainly have deeper pockets. Then your monopoly on exclusive content falls apart, you Balkanize the landscape, and you hurt everybody in the ecosystem.

And artists can’t get along with themselves, never mind others. How do they decide whose album gets promoted and for how long? Furthermore, right now Tidal doesn’t have critical mass and artists need other platforms to succeed. You don’t expect retaliation? I do. I certainly expect artists to break ranks, to provide content to other companies, therefore dissipating the hegemony.

Maybe someone will buy Tidal, and everybody will get paid. But who is that company? Apple’s already got Beats. Facebook is about user-created content. Amazon is not about acquisitions. And Google already owns streaming music, with YouTube.

Why don’t these artists go home and write compelling music?

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  1. Heriberto Gallegos says:

    Entanglement of resources can become critical although risk is always part of the mainstream wich comes to my point. Logistics rules over all …

  2. James Hetfield says:

    Beer Good! Napster Bad!

  3. Yarden says:

    Tidal doesn’t have a free option because none of their music playlists have ads. Spotify charges $10 a month for ad free listening…same price as Tidal.

    I don’t get why people are bashing Tidal..if you can’t afford it then don’t download it..simple

    • Jenny Cruz says:

      People are bashing it because these Artists are taking their music away from listeners who can’t afford to pay 10-20 a month just to listen. They are pulling their music off other sites and making it exclusive to Tidal users. So if your a music fan who can’t afford that kind of streaming then you are screwed if this is the future of music. It’s about the bigger picture. If this becomes successful, music will be harder to get for the poor and only available to those who can overpay for it. Not to mention it’s pure greed in the first place! It’s disrespectful to loyal fans to help make them rich to begin with. Ppl have a right to be upset.

    • IluminatiConfirmed says:

      “If you can’t afford I then don’t download it…simple” And that’s why it’s failing

  4. Cory says:

    that comment right before mine is obviously fake. You couldnt even buy plans with Tidal when it was posted. The author has a point; im sticking with Pandora.

    Dont waste your money on that crap, even Google Play’s music service is better, if you want to pay

  5. djstanun says:

    I think tidal is awesome. I got the 19.99 package why, cause when you know what music should truly sound like your ears will thank you. Also the videos are in so much in high definition i thought i was in the video. Of course it may not be for everyone just like Spotify is not for me. It’s up to the consumer right?

  6. Ian Cross says:

    “It’s kind of like getting a new stereo”

    “this is the only one that streams in lossless, i.e. CD quality, and it sounds fantastic.”

    “I can tell you is the sound of WIMP is blowing my mind.”

    “So long MP3s, you were always an imperfect medium.”

    “I recreated a playlist in Beats Music and then I did the same thing in WIMP, and I was wowed.”

    “I decided to sync/download the tracks, and they were a REVELATION”

    “You hear instruments you didn’t know were there when you listen in lossless. They become rich, three-dimensional.”

    “Once you’ve got WIMP lossless, you want better headphones, you want to spread the word, all the while having a smile on your face.”

    This is what Bob Lefsetz had to say about Tidal (formerly known as WIMP) before JayZ bought the streaming service.

    Why has he now gone out of his way to skewer a product he clearly loves? Is it just because the new owner is famous? I can’t come to any other conclusion except Bob is taking the line that will get him more press.

    Here are some things Bob and the rest of the media ignore while reporting on Tidal:

    1. Almost every media story(including the one above) made a big deal out of the $19.99 monthly fee. However as you well know(but fail to report) Tidal has a $9.99 subscription fee. You could of just as easily reported the story as such: “Tidal’s monthly fee is the industry standard $9.99. However, for people who would like better quality audio, there is a $19.99 package

    2. The biggest misconception about Tidal is one the media (Or Bob) did nothing to dispel. Tidal isn’t just trying to get more money for their billionaire owners, they are trying to get more money for all artists. That’s a great thing
    3. While the average person would might not know the difference between hi fi and medium fi, there absolutely is a huge difference between 96 kbps and lossless. It should be the industry that dictates the standard not the consumer. The music business never asked what the fan thought about vinyl albums, they simply sold them.

    For Bob Lefsetzt not to understand, clarify and champion these issues because of a perception he would be fighting for the rich music class is shameful.

  7. Boris says:

    Surely the article should reference the higher quality streaming and integration into hardware Tidal has.

  8. tvonez says:

    The label deals for free streaming services r about up. No label, songwriter, artist will do any more deals that involve free streaming. The playing field levels. Kendrick had 9.6 million album streams in a day on Spotify. It only generated $44k gross. 9.6 million album sales generate $96 million gross. Songwriters who write most of the songs don’t do concerts, get endorsements or anything. We live off our publishing. Free streaming is finally gonna die.

    • IluminatiConfirmed says:

      It’s not going to die, because people are cheap and don’t like to pay

    • There’s no way 9.6m people were going to buy kendricks album, ever. Maybe 96,000 in the first week. That is a ton of exposure for him and that’s something artists need to realize.

    • Bella London says:

      Your argument assumes those who streamed Lamar’s album on Spotify would have downloaded or bought the album had the stream not been available. I guarantee you 95% of those people would have waited for the album to appear online and downloaded it illegally before paying one penny. And if these artist start pulling their material from these streaming services, they are going to drive the public to illegal downloading again.

    • jhs39 says:

      The problem with your comment is that you are accepting the label claims that they don’t make money from the streaming services that provide a free tier, which is complete B.S.. The labels are keeping almost all of the streaming money since they don’t consider it to be a part of any existing contracts with songwriters and artists. The terms under which Spottily and Pandora reimburse the labels for music is secret–the contracts they sign with Spotify and Pandora include explicit non-disclosure agreements that prevent the services from explaining exactly how much they pay for each play of a song. The labels are crying poverty because they think they can make more money from forcing these companies to get rid of the free tiers but they aren’t being honest with anyone about how much they are making already from the streaming services. Again, those contracts include non-disclosure agreements on the part of Spotify and Pandora and the contracts themselves are considered trade secrets by the labels who won’t open up their books concerning this new revenue stream.

  9. Corey says:

    Have you guys seen the promotional video for Tidal? All these artists look insane.

  10. Bella London says:

    I love Spotify. I love it so much that I pay $10 a month for it. Spotify is how I discover new music. If I like the music enough to want to listen to it in my car, I will buy the CD. I just bought One Direction’s ‘FOUR’. (I know, I know but the album is actually really good, trust me. I’m 33 and have no reason to lie). Guess who’s album I haven’t heard yet…Taylor Swift. Why? Because it isn’t on Spotify.

    Here’s where Jay Z and the Tidal 16 fail. They believe that ‘exclusive content’ is enough to make me switch. It isn’t. I would rather spend my money on rent and food than see Beyonce sort of playing the piano in her living room, singing a song that would never make it to radio. Oh, how do I know about Beyonce’s exclusive content if I don’t have Tidal you ask? I saw it on YouTube. For free.

    • jhs39 says:

      I pay $10 a month for Spotify as well and think the service is well worth the money. But there are problems–one is that Spotify isn’t actually making a profit because the contracts they have signed with the labels for music is so onerous–the exact amount the streaming services pays for each song play is enough that Spotify can’t make a profit even with a billion plus dollars in earnings in a single year–where do you think all that money is going? The music labels can’t force people to pay for streaming services any more than they could force people to keep buying compact discs–just as a reminder of the not so distant past, those RIAA lawsuits against individual people who downloaded music were pursued under the false assumption that suing music down-loaders would get people to buy compact discs again–take a look at news articles from that period. The whole purpose of those lawsuits was to reverse the drop in sales in compact discs–how well did that work? The labels are already forcing Spotify to operate under such onerous terms that they cannot make a profit–forcing the elimination of the free tiers is meant to force people to pay the subscription but it’s not going to work–people who don’t want to pay for music will find some other way to listen to it for free. Period. Label greed will end up strangling Spotify because eliminating a free ad supported tier will also eliminate most users of the service.

  11. jhs39 says:

    Music artists think Spotify is crap for them because the licensing Spotify and other streaming services pays for music is hidden from artists and the public and branded a trade secret. I read an article about one of these licensing contracts that got leaked–the labels actually make ridiculous amounts of money from the services even though they are crying poor, blaming the services for the fact artists aren’t making money from streaming and trying to kill the free tiers on Spotify and Pandora altogether, which will likely kill the services as well. Spotify reported 1.3 billion dollars in earnings in 2013–and didn’t turn a profit. All of that money and more went to the labels who are claiming to the public and their artists that the streaming companies don’t generate any real money. Music artists should band together and force labels to reveal the secret licensing contracts they have with the streaming services so they understand exactly how much they are being screwed and also understand how the labels through short-term greed are in danger of strangling the streaming services just like they killed the compact disc.

    • PS says:

      Yes. But organisations like RIAA make you want to believe that the people, who download without paying are the bad guys, when in the reality the record companies are not better and cheap and try to keep as much money as they can from the artists.

  12. nypbbob says:

    Bob, as usual, you are spot on…

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