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

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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