Yesterday, musician Jay-Z and a number of other millionaire musicians announced the (re)launch of Tidal, a streaming music service. It had initially gained some small amount of traction in the audiophile market as a lossless music streaming service (under the name WiMP), notably with a good selection of classical music, before being purchased by Mr. Z. While it still offers lossless streaming – in a more expensive plan – the basic Tidal offers 25 million tracks for the standard price of $10 a month. What sets it apart is the fact that it is the fact that the majority of the company is owned by artists.
This ownership means nothing, though, in the broader scheme of things. Unless these musicians – and there are some big names, including Rihanna, Kanye West, Madonna, Nicki Minaj, Jack White, Alicia Keys, Daft Punk, and Beyoncé – have become Marxists, the company won’t pay out much more to artists than other streaming services. Even if they can increase royalties by 50% – which probably isn’t difficult, given the low royalties paid to artists by other streaming services – that won’t help fledgling artists very much. What it will do, however, is help continue to line the pockets of the artists who do sell lots of music. I find it suspicious that when launching a streaming service that is supposed to be fair to artists, they’re unable to say what they’ll be paying.
Mr. Z – whose real name is Shawn Carter – seems to have a flimsy grasp of economics. He is quoted by the New York Times as saying, “Water is free. Music is $6 but no one wants to pay for music. You should drink free water from the tap — it’s a beautiful thing. And if you want to hear the most beautiful song, then support the artist.”
Perhaps Mr. Z doesn’t realize that most people pay for water; perhaps that is not the case for him. But comparing music to water shows that his liquid-based business model needs a bit more fleshing out. Also, what music costs $6? An album? A download? Most CDs cost more than that, as do most albums sold as downloads. Mr. Z’s albums are certainly not $6 each.
I wholeheartedly agree that artists need to be paid more fairly, and that streaming music services are just another way for record labels to exploit artists. But there’s no way that Tidal will change that, at least not unless these millionaire co-owners – who, according to the New York Times, have not invested their own liquidity in the company, but have been “granted shares in exchange for their good-faith efforts to supply exclusive content” – are prepared to not take profits in order for smaller artists to be able to afford to pay their water bills.
Mr. Z is also quoted as saying: “I just want to be an alternative. They don’t have to lose for me to win.” Actually, they do. Because very few people subscribe to more than one paid streaming service. So the only way for Tidal to win is for them to attract users from other services. It’ll be a tough slog.