The Music Business

April 2, 2015

There was a big, much-discussed announcement about Tidal the other day, a relatively expensive, Spotify-like streaming music service Jay-Z bought for about $50 million a while ago. He’s (or whoever works for him, I guess) relaunched it as an “artist-centric” service, with the idea that exclusive content will justify people (a) paying more than they would for Spotify, and (b) paying at all, which the vast majority of Spotify users do not do.

Not a bad idea, just an uninteresting one

Tidal is not a solution for anything other than our inability to remove the middlemen who helped make Tidal’s artists famous enough to eventually start Tidal.

There are a couple reasons I think this isn’t going to work. Tidal’s model for obtaining exclusive content is — apparently — to give 3% equity chunks of the business to a couple of huge stars, which might have made sense in 1996, but makes absolutely no sense in a world that is completely flooded with cheap music and aspiring artists. What Tidal needs is a quasi-monopoly — the kind of quasi-monopoly the music industry as a whole used to have in the glory days of profitable music sales. That’s back when making albums and distributing the finished result to people was so outrageously expensive, artists would literally have to find record labels with sufficient size and resources in order to even make their music available to the entire country, let alone the world. Green Day famously made this calculation back in 1993 or so, when they realized that the kids they met on tour in small towns couldn’t buy one of the band’s records even if they wanted to, because it wasn’t in any nearby stores.

Needless to say, that world is so different from the current reality, we might as well add some dinosaurs and volcanos to the mix. Everything about the world I just described isn’t just different — it’s actually the exact opposite. Anyone on Earth can go download my last record in 2 minutes, which we made for approximately zero dollars. Seriously, go get it if you want. No one will stop you.

What Jay-Z, and most of the artists he’s signed up, don’t seem to understand is that they themselves (or at least their “brands”) are products of this old system. Look at this chart. Almost nothing is as popular as the things that were popular ten or twenty years ago, because we simply have so many more choices to pay attention to. Good for them for getting famous while the getting was good, but if they think they bootstrapped their way to the top only to have their hard-earned money siphoned away by the likes of Spotify, they’re delusional.

One last cash-grab at the trough of the CD-era

Tidal is not about making money for “artists”. It’s about making money for these particular artists, which should be obvious by the fact that they’re not offering some sort of standard, Fat Wreck Chords style profit sharing for anyone on Tidal — just equity for these couple of big names. It’s not a different way to experience music. It’s just a different group of people to pay, and that group isn’t even all that interesting or diverse. Jay-Z. Beyonce. Kanye. Rihanna. The freaking Coldplay guy. Jack White. Holy smokes, MADONNA? Have you had trouble paying Beyonce money lately? Do you need a better platform for doing that more directly? 

I mean, what year is it, anyway? These people all had enormous, old-style releases and media machines shoving their work down our throats TEN YEARS AGO, when people had flip phones. Isn’t that kind of a funny coincidence? 

Tidal won’t matter unless it finds a way to generate new artists with the commercial heft of it’s equity holders, without that creation being subsidized by 90’s style media company money (and the industry mechanics of the 90’s-00’s, which are long gone), and while still convincing those new artists to provide exclusive content to Tidal without getting equity. I have no idea how you’d do that, and I doubt Tidal does either, but if they figured it out, they’d be on to something very interesting.

This, though? It’s not a solution for anything other than our inability to remove the middlemen who helped make Tidal’s artists famous enough to eventually make Tidal, and in the process, pay more for music. This is Vertu for music. Enjoy it, if that’s your thing.