Tidal Is Losing More Lifeboats by the Day

Yesterday, TechCrunch ran a piece from Kelli Richards postulating the viability of Tidal as a service, and its likely outcome in the streaming wars. The article was essentially an overview of what’s been going on with Tidal lately, with Richards doing a good job of zeroing in on a couple of things I’ve discussed and underscored in my own mind as the real deal-breakers.

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Before getting into the two main things of her article, I think it’s important to note a very shortbut important—sentence in Richards’ piece: “…the prospects of Tidal upending Spotify in the near future are slim…” This falls right in line with something that I wrote earlier concerning SoundCloud, namely that trying to out-Spotify Spotify is a losing battle and a very poor battle-plan. Going head-to-head with Spotify and playing their game their way (that is, general popular music streaming) is such a poor decision because it means you’re starting way behind the starting line. And in Tidal’s case, this goes double for any sort of exclusive content which might be your main attraction.

Now, Richards’ two main points, and my takeaway from each:

1. Premium/Exclusive Content—Firstly, I’ll be the one to say it: “exclusive content” as one’s main gameplay is a very tough sell. It’s a tough sell because it’s a drastically diminished niche of a larger market, which is basically popular music. That means you’re trying to play on two different levels with two completely different mindsets.

The “exclusive content” play is difficult because it requires your customer base to desire those exclusives almost as much as (or more than) the original content. This isn’t anywhere near the same thing as looking at an independent market, since those content producers are increasingly giving away their material for free (including “exclusives” like remixes, acoustic sets, etc.), and making money elsewhere. For a service like Tidal though, they need to first out-Spotify Spotify to gain the market share of the original popular music demographic, then they need to persuade those people to convert to “exclusive” consumers and pay a whole lot more for something they could just as easily get on YouTube if they wait a couple weeks or a month. This is one of the major flaws in Tidal’s plan in my eyes.

Also under the first point is a small comment included by Richards made by Tidal’s CEO Peter Tonstad, which basically asserts that the industry is moving away from the freemium model, and that “it’s going to be the content richness” which listeners begin to look and pay for. This is bold, but false.

First, the sorts of audiences which Tidal is looking to court—general consumers of popular music—are not about to leave the freemium paradigm anytime soon. Secondly—and funnily enough in my opinion—the rabid, content-rich focus which Tonstad identifies as Tidal’s silver bullet doesn’t really apply to popular consumer audiences on a general level anyway. Ask anyone listening to Spotify if they’d pay double (or anything) for higher quality which they can’t even discern anyway, and I’d be surprised if large numbers converted over. Ironically enough, the rabid thought process which Tonstad is alluding to is alive and well—in the independent music industry—where free plays a much bigger part than it clearly does with Tidal.

2. Celebrity Backers—This point made by Richards is a lot easy to wrap one’s head around; people simply don’t feel so bad when Jay-Z and Kanye West start lecturing about needing more money because, well, they’re rich. And not like “we perceive them as rich but they’re really not;” they actually are rich. Being lectured about money from people like that, then, is not only not welcomed, but it’s really irritating. There’s really no way you can look at that celebrity-backed list of Tidal promoters and take them seriously.

Even more so, though, it really alienates artists who are not rich—you know, like everyone else. For the singer-songwriter playing in dingy clubs, or the band on the road and sleeping in their van, Jay-Z might as well be speaking an alien language. Their thought process is almost indignant (and why shouldn’t it be?); they’re thinking “dude, you have all this money and influence, why the hell do you need any more?” And frankly, if I was still an artist, I’d be thinking the exact same thing. Celebrity-backed things like this are rarely ever a good idea, especially when it alienates others within the same industry.

Richards notes that Tidal has someone who Spotify doesn’t—Taylor Swift—but as I explained here months ago, here’s why Taylor Swift is on the same level as Jay-Z in terms of “not getting it.” She’s so engrossed in the major label paradigm and its trappings that she doesn’t see what life is like for normal artists anymore. And, just like Jay-Z, her disparaging remarks about artists “devaluing their music” strikes a sour and indignant chord in a lot of musicians who think she takes her good fortune for granted.

But if one needs any more convincing of why it’s going to be a very tough road ahead for Tidal, you can read about:

  1. Jay-Z’s hissy-fit onstage
  2. Their firing of their previous CEO, Andy Chen
  3. Criticism from producer Steve Albini
  4. Criticism from other mainstream artists
  5. Their highly criticized and misleading relaunch

The storm isn’t about to end anytime soon, and it seems the lifeboats have left the ship.

Jay-Z’s Tidal “Freestyle” Was Basically a Hissy-Fit

A couple of days ago, during one of his Tidal concerts, Jay-Z went on a rant, and basically laundry-listed a bunch of people whom he felt have been wronging artists in the music industry. He called it a freestyle, but that’s not really what it was. To anyone who’s not a Jay-Z fan (and probably to many who are), it came off as a hissy-fit.

Jay-Z at one of his TIDAL concerts

Jay-Z at one of his TIDAL concerts

It’s not surprise that Jay-Z and company have been having a hard time of it with their new Tidal streaming service. I posted about their launch here, and then followed up with posts on criticism of Tidal from folk band Mumford & Sons, famed producer Steve Albini, and the sudden removal of their (now former) CEO Andy Chen. It’s been a tough couple of months for Tidal, yet instead of putting his head down and working to find a solution to differentiate his music service, Jay-Z thinks it’s a better tactic to antagonize the competition. Though it might make him feel better in the moment, it comes off as petty and juvenile. He looks like a kid throwing a fit for not getting his way.

In his “freestyle,” Jay-Z attacked not only other music services (Google, YouTube, Apple), but called out a few people by name (Jimmy Iovine). Jay-Z asserts that he came into the music game as an independent…which may be true, but that was more than a decade ago, and the musical landscape has changed a hell of a lot since then. The same rich people he’s insulting are his peers—I don’t think he goes home at the end of the night wondering if he’ll make enough money to tour next month.

Frankly, watching him play the victim is getting tiresome. Jay-Z needs to accept the fact that running a music streaming service may in fact be more difficult than he had originally thought. So stop whining about it, put your head down, and work out the problem until you have a solution. That’s how everyone else does it. Getting up on stage and attacking your competitors doesn’t make you a good business person. It make you appear socially and strategically tone-deaf.

Here’s the (mainly) full text from Jay-Z’s rant:

“…So I’m the bad guy now I hear,

because I don’t go with the flow

Don’t ever go with the flow, be the flow…

Pharrell even told me go with the safest bet
Jimmy Iovine on for the safety net
Google dig around a crazy cheque

I feel like YouTube is the biggest culprit
Them niggers pay you a tenth of what you supposed to get

You know niggers die for equal pay right?!?
You know when I work I ain’t your slave right?
You know I ain’t shucking and jiving and high-fiving, and you know this ain’t back in the days right?

…You know I came in this game independent, right?

TIDAL, my own lane, same difference

Oh niggers is skeptical about they own shit
You bought nine iPhones and Steve Jobs is rich…”

The Typhoon Keeps Coming for Tidal

It’s not been an easy couple of weeks for new music service Tidal. A slew of bad press and criticism during and immediately after the service’s launch is continuing to be a thorn in the side of the company’s leadership. So much so that a major restructuring was just announced; things aren’t about to get easier any time soon.

I was first a little skeptical of Tidal during its much-hyped launch, then again when it enjoyed a spate of criticism from mainstream band Mumford & Sons, and most recently when producer Steve Albini piled on to the already bruised service. Things have just been really bad for Tidal since it emerged in the last few weeks. Now it seems that the service itself is intent on rubbing salt in its own wounds.

Business Insider broke the news today (as did other sources like Digital Music News) that Tidal was being strongly shaken up; 25+ people on the Tidal team were being fired to make room for a new direction. Of these, the name that surely drew the most attention was And Chen, the now-former CEO of the service. Maybe it’s just me, but firing your CEO just a couple weeks after your very public launch seems to say a lot about a company’s fortunes, at least in the short-term.

Former Tidal CEO, Andy Chen

Former Tidal CEO, Andy Chen

Chen’s removal will make room for Tidal’s former CEO Peter Tonstad (who was the former CEO of Tidal’s parent company Aspiro Group). In an statement to BI, Tidal commented on the impending change:

TIDAL’s new interim [sic] CEO is Peter Tonstad—a former CEO of parent company Aspiro Group. He has a better understanding of the industry and a clear vision for how the company is looking to change the status quo.

Correct me if I’m wrong, but did Tidal just admit that their now-former CEO—Chen—was basically unqualified for the job? Because that’s essentially what I heard. After all the fanfare that Tidal inundated the press with around its launch, I thought for sure that they at least had a concrete plan to try and accomplish their goals. As critical as I was at the time, I at last figured that their leadership had sufficient experience and vision to make the Tidal brand somewhat competitive for a little while. Clearly that’s not the case.

I was critical of Tidal before because I thought (still think) that they’re attempting to sell a product (service) that essentially is very expensive and not wanted by enough people to offset the expenses to provide it. I was critical because the artists who I saw standing up on stage during the launch don’t need any more money in their pockets, and it came across to me as greed.

Now I’m critical of them because changing your CEO and firing 25+ employees ~20 days after your very public launch is not a good way to start the spring. It shows both a lack of preparation for your business market, and frankly a lack of appreciation for your prospective audience and their thoughts. Actually, you come off as socially tone-deaf.

We’ll see how this progresses, but I must say, I am really not impressed with Tidal’s handling of this entire situation. This is not the way to build trust in an industry that is basically overrun with distrust, and filled with people who are used to getting taken advantage of. This is not a good start; not a good start at all.

Tidal’s Choppy Waves Keep Rolling

The choppy waves keep on coming for Jay Z’s streaming service Tidal, as today it was hit again with another round of criticism. I myself outlined my thoughts on the Tidal service first in a post when it launched, and then again in a questioning follow-up post earlier this week. This time, though, the critique comes not from disgruntled music streaming fans or competitive services, but from Steve Albini.

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Tidal logo

Tidal logo

For those unfamiliar with Albini, he cut his teeth in the mainstream spotlight producing albums for artists like Pixies and Nirvana, and has become an outspoken critic of many of the streaming services in the last decade. A criticism from Albini can’t be as easily dismissed as it might otherwise be particularly because he has both the industry experience and insider knowledge to call those in the industry on their bullshit.

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Steve Albini; Photo courtesy: Jordi Vidal, 2014

Steve Albini; Photo courtesy: Jordi Vidal, 2014

Albini has been critical of the mainstream music machine even before Kurt Cobain’s death, jumping into the mainstream music business debate in 1993 with his piece entitled The Problem With Music. He’s done the math and lived out many of the results, and so when Albini takes aim at your service, you better realize that other people in the music community will take notice (even if the mainstream isn’t).

In an interview with Vulture.com, Albini used phrases like “little streaming fiefdoms” and the “budget version of Pono” when referring to Tidal. While the latter comment is a critique on the mainstream listener’s ability (or even care) to distinguish between lossless quality and normal mp3 audio quality, the former is almost a little more telling. “Little streaming fiefdoms” is pretty telling in and of itself; it’s dismissive of what Jay Z and company say Tidal is (and purportedly will be), instead asserting that the service is yet another little city-state vying for validation in the greater streaming landscape.

Perhaps the most intriguing thing about this particular thought process is what it means for the dynamic of the current landscape; as Albini (and others) become increasingly critical of services that act like little principalities, the traditional walled-garden approach to music seems to be under siege. And there are those of us who rejoice in that. The walled-garden concept works well in numerous areas of tech and business—it’s great for security, healthcare, and finance. But it is not good for media, and music specifically.

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Criticisms of Tidal on Buzzfeed the day after its launch

Criticisms of Tidal on Buzzfeed the day after its launch

Music is freedom, and needs to be treated as such. To constrain music to the dynamics of a walled-garden system is to take away so much of the actual discovery and freedom that is associated with it in its purest form (though many would argue that there’s still plenty of “discovery” to be had). Regardless of this fact though, it remains an important fact to note that people of Albini’s caliber are taking aim at people like Jay Z and services like Tidal.

One might even argue that they—whether they intend to or not—are clearing the path for new music services yet to be launched. Only time will tell in that regard. For me though, this does not go unnoticed. Anyone interested in the future of the music industry would do well to keep these criticisms catalogued and fresh in mind. It’s precisely by graphing these grievances that we will begin to see how the future of the music industry will unfold.

Tidal Is Really Just a Ripple in a Larger Ocean

The Basic Background

Yesterday, Jay Z and company relaunched Tidal, the new music streaming company that they’re convinced is “the future of music.” After a $50+M purchase of Tidal (in the form of Aspiro) last year, Jay Z has been bending our ears with how the rerelease of the new service will be the best thing ever for artists, revolutionize the music industry, provide the best listening experience…blah, blah, blah. Only it likely won’t do any of those things.

Not the First Anything

In order to understand why Tidal likely won’t make good on any of the things Jay Z and his companions have promised, one needs to understand how the music industry works. First, let’s get something out of the way that’s been bugging me since I heard it during the launch party last night: “Tidal is the first ever artist-owned music service.”

No it’s not. NoiseTrade has been around since 2006, and was founded by singer/songwriter (that means artist) Derek Webb. So already it’s clear that the Tidal team needs to do a better job of researching their claims before making them.

No, It’s Really Not “Artist-Owned”

Next, the phrase “artist-owned service” is nice and poetic, but it’s frankly wholly untrue in this respect. Let’s examine the laundry list of artists now attached to the Tidal moniker and company:

  • Jay Z – Signed to Roc Nation (which he owns, and which had distribution deals with Sony Music (2009-2013) and Universal Music (2013-present)
  • Rihanna – Signed to Roc Nation (see above)
  • Beyoncé – Signed to Columbia (which is owned by Sony Music)
  • Alicia Keys – Signed to RCA (which is owned by Universal Music Group)
  • Daft Punk – Signed to Columbia (which is owned by Sony Music)
  • Madonna – Signed to Interscope (which is owned by Universal Music Group)
  • Kanye West – Signed to Def Jam (which is owned by Universal Music Group)

I could go on, but you get the point. This is not the “first ever artist-owned music service.” Frankly, it’s not really even “artist-owned;” it’s “label-owned by extension.” Let’s call it how it is, and pretending that these major label artists are independent operators is to fabricate an ideal (but false) reality. While it looks as if these artists belong to a whole slew of different labels, as my previous post on major label monopolies shows, this is a misleading thought process as they are more or less all owned by the Big Three. If anyone thinks that any of these artists will have the power to do things outside the interests of the three major record labels, they’re dreaming.

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The Big Three Major Labels and Their Subjects

The Big Three Major Labels and Their Subjects

Basically the Same Layout

Next, let’s talk about why the business model of Tidal is fanciful and unrealistic. TechCrunch reported earlier some details demonstrating that Tidal’s layout and functionality are basically a ripoff of Spotify’s layout. From what I’ve heard, Tidal basically copped Spotify’s layout, changed the colors, and added a few tweaks—but it’s not really all that different.

Married to An Obsolete Business Model

In terms of business model, what seems to make Tidal the most different is its decision not to offer a free tier (as Spotify and most other music services do). Rather, they will offer a high-quality lossless music experience for $20/month, and a downgraded, “premium” lower quality experience for the same $10/month that Spotify and other services charge (which, by the way, is an obsolete business model anyway). Jay Z and others at Tidal are banking on the hope that the rabid music fans out there will want to pay more money for higher quality music, in addition to more exclusive content on the Tidal service first.  While some music fans may in fact do this, it’s not a scalable hope because those fans are not the majority of music listeners.

Also, note that I said “more exclusive content on the Tidal service first“—which means it will definitely be available on other services too, just maybe a week or two later. And why not? Do you really think that the major labels who work with these artists are going to forego any revenue stream, just to keep Tidal more exclusive than the rest?? I don’t.

Tidal logo

 Tidal logo

So basically Tidal is going to offer the same major label music that is available everywhere else (including on non-music centered services like YouTube), but they’re going to nix the free tier (where most of Spotify’s conversions come from anyway) altogether and double the going rate for a monthly subscription. All the while, they will be aiming their service at a more niche market while providing non-niche music. Here’s my reality based on my experience in the music industry: high-fi, low-fi, it really doesn’t matter if your business model is outdated and your marketing strategy is insufficient for an overcrowded market. But yeah, this will definitely end well.

An Unscalable Model and Too Many Cooks in the Kitchen

Let’s move on, and I can’t believe no one has really focused in on this, especially those within the tech community (though it was mentioned a bit in the TechCrunch report): Jay Z has enticed these other major label names into becoming a part of this service not by offering them money up front, but by actually giving them equity percentages of the company. As reports that the equity numbers hover somewhere around 3%, this is an admirable shot by Jay Z. He’s trying to tie those artists’ respective loyalties to Tidal by making the service’s benefits their benefits. If Tidal does well and goes up in value, so do their stakes.

There are only two problems with this: 1) it’s not scalable, and 2) too many cooks in the kitchen. In an industry (tech startups) where founders are always told to limit the number of cofounders (the “too many cooks in the kitchen” nightmare”), Jay Z has amazingly disregarded the whole thought process and it seems no one has really noticed. What’s more, conducting company decisions in a “town hall” style is going to spell disaster for Tidal; you just can’t run a company like that. There needs to be one captain at the helm of a ship; any more and the ship will capsize. Also, keep in mind many of these artists don’t even work well with others in the studio—now they’re all going to run a company together? Right.

So to recap: unscalable business model and too many cooks in the kitchen.

More Dedicated to the Needs of Which Artists?

While I admire the desire by Jay Z and others to create a service that is more dedicated to “the needs and rights of artists,” let’s also be clear which artists those people are. They are not the artists the world-over who are coming up and trying to find their fanbases; they are the artists who already have legions of fans all over the world. We’re not talking about the girl from Minnesota who wants to be an R&B singer, or the punk band from Toronto who want to find their core fanbase. We are talking about (mostly) pop, rap, hip-hop, R&B, pop-rock, and other well-known stars who want to extend their control beyond their music to dip their toes in the music-tech industry.

I’m only critical because these are exactly the kinds of artists who really don’t need help right now. They have enough money, and even if they hop from label to label, their fans will follow. They have already found their fanbases and core listeners. It doesn’t matter which label or service they’re on, those fans will still find them and listen to their new albums and go see them on tour. So basically this is yet another rehashing of the same major label music that we’re already drowning in anyway. And while I’m a fan of some of these artists myself, I nonetheless am critical of what appears to be another desperate money grab. As the following screenshots demonstrate, though Jay Z and others may not see it that way, the point is that most of their fans will ( and do):

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Comment from BuzzFeed coverage of the Tidal release, number 1

Comment from BuzzFeed coverage of the Tidal release, number 1

Screen Shot 2015-03-31 at 3.12.36 PM

Comment from BuzzFeed coverage of the Tidal release, number 2

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Comment from BuzzFeed coverage of the Tidal release, number 3

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Comment from BuzzFeed coverage of the Tidal release, number 4

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Comment from BuzzFeed coverage of the Tidal release, number 5

If these artists really wanted to distance themselves from the major labels and the current music business dynamic, they would look for ways to explore other paradigms, rather than look for ways to make an obsolete system work.

In the End

In the end, I commend these artists for taking a step into a new arena, but I question their motives and the realities surrounding Tidal as a company. Personally, I think Jay Z way overpaid for Aspiro, and is seeking to build a service that really only artists (and that is to say a select kind of artist) will really appreciate and use. I don’t think that Tidal sets itself apart enough to really take over the demographics targeted by either Spotify, Apple Beats, or even SoundCloud. I think it’s a lot of bluster, but without any real solid business prospects. Only time will tell, but I think that Tidal is going to have a very tough time right out of the gate. We’ll see if Tidal is part of a rising tide, or simply another ankle-slapper service.