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Ben Howarth in 'Condemned to Rock 'n' Roll' examines Jay-Z's new streaming service and Spotify rival, Tidal
With much fanfare, Jay-Z has launched Tidal, his rival to Spotify – and he’s got his celebrity friends to jump on board as investors too. Every venture needs capital at first, and it won’t have escaped anyone’s notice that Jay-Z has touched only the very richest pop stars for a loan.
It may well succeed. After all, Jay-Z has been a sporadically successful entrepreneur – he will do anything to increase his "net worth", provided that such a thing relies merely an extension of one of his many brands to someone else’s product. (Hilariously, at Tidal’s launch, Jay-Z said, “People really feel like music is free, but will pay $6 for water” – he should know, having recently signed the contract for an exclusive commercial tie-up with a bottled water company).
Given that, we can but speculate on the motivations at work here. Jay-Z may have cast a green eye at Dr Dre and his headphones, or at Dave Grohl and his documentaries, or even at Bono and his charity work. Or, more likely, the company for which he is a mere figurehead saw music streaming as a sensible way of maximising the rewards from paying Jay-Z so much money for so little work.
After all, Tidal is not exactly Jay-Z’s idea. It has operated, under a different name, since 2009 – though it only launched in the UK last year. At the time Jay-Z’s company bought it, Tidal had just 500,000 paying subscribers. Until its recent re-launch, its selling point had been higher quality streams that offered on Spotify (at a correspondingly higher price).
Now, pitched as an "artist-friendly" service, it will go head-to-head with Spotify, but with one crucial distinction – there will be no free streams. Spotify defend their free service as the introduction that has successfully enticed 15 million users into a paid subscription (six times larger than the subscription base of its largest rival). Critics are more worried about the 60 million users of the free service, from whom only advertising revenue is generated. Even a small portion of these free-riders switching back to paying for music would be a boon to the industry.
Frankly, few of us are losing sleep over whether Coldplay feel properly rewarded for their art. But, by pitching Tidal as a crusade on behalf of his brother-artists, Jay-Z has created a cunning fall-back should his seemingly risky investment fail. It is interesting to note that, when asked who this would really help, he focused on the behind-the-scenes operators (he described them as "songwriters", but we all know he really meant the army of lawyers who persuade the original authors of the songs he raps over not to sue him).
He clearly wanted to sound like he was sticking up for the little guy, but it is a slightly warped mind that considers "royalty rights" a matter for social justice campaigners. Instead, I read this as a tacit acceptance that Jay-Z is looking out for his mates, and has no interest in improving the lot of your favourite bedroom-based singer-songwriter.
The cards that will decide whether Tidal can live up to its promise of an "artist friendly" music industry have yet to be dealt, and the labels (who are the ones who actually cut the deals with the streaming services) have yet to place their bets.
After all, while current artists feel threatened (and exploited) by streaming sites, labels have seen a new river of revenue flowing out of the dustier corners of their back catalogue. Madonna – one of Jay-Z’s investors – doubtless wants you to stream her latest album. Warner Music, however, still get paid if you opt to stream the hits you already paid for once the first time round.
That said, Jay-Z has rounded up enough megastars to get Spotify worried. One of them, Taylor Swift (a keen reader of this column) was the first to take her straws out of Spotify’s metaphorical Ker-Plunk. If her fellow investors all follow suit, a lot of marbles will surely then fall.
And yet, in the contest to break the music industry’s mould, Tidal is likely at best to make a chink. A number of much bigger hammers are being readied for a swing. Google are preparing to launch a paid-for subscription model through YouTube and Apple are preparing to re-launch their ‘Beats’ service as a Spotify-rival in June. Having stayed on the sidelines, you get the sense that Apple’s entry into the game could change everything – building a streaming service on top of ITunes is rather like putting a hotel on Park Lane. It could take every other player out of the game.
Meanwhile, Spotify is becoming little more than a bargaining chip. A premium account is already being offered as a bonus if you buy a subscription to the Times, and a deal has recently been struck to link Spotify to the Sony Playstation. Is this a sign that Spotify has enough in the bank? Or one last roll of the dice? For all the ‘experts’ queuing up to predict where the music industry might go in the next decade, nobody really knows.
Even Jay-Z, not known for his modesty, sounded rather apologetic when he told a press conference, “We didn't like the direction music was going and thought maybe we could get in and strike an honest blow. Will artists make more money? Even if it means less profit for our bottom line, absolutely.” Quite a change in tone from when he boasted, “Put me anywhere on God’s green earth, I’ll triple my worth” back in 2001.
So, why does Tidal matter? Well, firstly, it proves false those early predictions that Spotify would free artists from major label oppression. But, more importantly, it is the first battleship sunk in what promises to be a best of several-rounds contest, over which the fate of the long-promised universal online music library rests. If the wrong side wins, fans will have to choose which streaming service (if any) has the albums they will want.
Much as football fans are now required to pledge their loyalty to Sky Sports rather than their local clubs, so too will fans now choose between different streaming services, from which the "content" springs. The loyalty will be to brands, not bands. Perhaps that’s a belated recognition of reality, but it’s hard to see anything "artist friendly" about it.