In June 2015, a week before the official launch of Apple Music, I was given an in-depth pre-release demonstration of the new streaming service. I was accompanied on this tour by a writer from another music publication, and our walk-through was guided by two high-level Apple Music representatives; all four of us were arranged on a couple of springy couches, huddled around a single iPhone in a sunlit suite in Soho’s Crosby Street Hotel. We spent an hour discussing the service’s functionality, methodology, and big-picture goals, and when our time was up, the other writer and I sat on a bench outside the hotel and compared notes.
We agreed that the presentation had been impressive, but also noted that beyond the window dressing, the basics of Apple Music differed little from those of any other streaming service — namely Spotify. There would be bugs, sure, but those would be fixed. There would be features, too, but if those features interfered with the experience of actually listening to music, they would be user-unfriendly distractions. Our conversation quickly shifted from a discussion of the product we’d just been pitched to one of philosophy, ethics, economics. All things being essentially equal, which service — Spotify or Apple Music — seemed more palatable?
I preferred Spotify, I said, my logic being this: Spotify is 100-percent invested in music. Spotify doesn’t do anything but music. Music is the sole reason Spotify exists. All three major labels — Warner, Universal, and Sony — have substantial equity investments in Spotify. Their fortunes, their futures, are directly linked. Spotify has no choice but to care deeply about music. And I like that! I like knowing that music isn’t a tiny boutique subdivision of Spotify; it’s their primary concern, their bread and butter.
Apple, on the other hand, I said … I mean, Apple has a valuation approaching $1 fucking trillion. Apple doesn’t give a shit about music. Are you kidding me? Music is a loss leader for Apple, the same way CDs were loss leaders for Best Buy. You walked into that warehouse to buy a CD priced below wholesale; you left with a 64-inch TV and a Best Buy credit card. Music is like Baltic Avenue on Apple’s Monopoly board. Yeah, they gotta own it to win, but they’re not all that concerned with the upkeep, the public services, the community standards. Spotify, though? Their whole world is Baltic Avenue. That’s where they’ve built their headquarters and their houses and their hospitals. If the waters rise and Baltic Avenue is wiped out, Spotify is fucked. So they have to protect it! But Apple has mansions on Park Place and Pennsylvania Avenue and … man, look around, they’ve got real estate everywhere.
The writer thought about this for a second. Then he said: That makes sense, but, well, look at it another way. Because Spotify is so deeply invested in the music industry, it undercuts the competition at the expense of the musicians. Spotify’s shareholders — including the major labels — want to inflate the value of their shares. How do they do that? By establishing a vast subscriber base, sure, but also by offering a free tier that generates tens of millions in ad revenue. Spotify’s shareholders want the company to wring every last dollar from the product, and the product in question is music. This is just a hypothetical example but: Spotify’s shareholders see more actual value in a single listener who streams a song 10,001 times than they do in 10,000 listeners who stream a song once. Spotify being in bed with the major labels is good for the major labels, definitely, but not necessarily good for the artists.
He continued: Apple doesn’t have to worry about what the labels want, though. Think about it. At the end of the day, Apple isn’t even selling music, not really. Apple is selling iPhones, iPads, laptops … Apple is selling hardware to every business in the world — every person in the world! Apple is an empire. Whether Apple Music turns a profit at the end of the day is totally inconsequential. What’s a few million dollars to a company that’s worth a trillion? For Apple, the real value is in the branding. Apple Music already has Taylor Swift, Drake, Ezra Koenig, HAIM … all these artists very visibly associated with their brand. Right? Ultimately, Apple Music doesn’t care one bit about what the labels want; it’s entirely artist-focused. Apple wants to keep the artists happy because the artists are helping Apple sell iPhones. Honestly, Apple wants to make these artists bigger and more famous — because the bigger and more famous they are, the greater their influence and reach. And as their influence and reach extends, so too does their value as sales reps for Apple products.
And with that, you’ve got the story of streaming in 2015: artist as product or artist as propaganda. Like Zuckerman’s Famous Pig in Charlotte’s Web, musicians today are being fattened either for slaughter or for show, but make no mistake: The beneficiary of all this shiny pink flesh is Zuckerman. It’s his pig, his pen, his farm. And either way, no matter what, there are a whole lotta little piggies not named Wilbur who are gonna go to market and just end up bacon.
Nobody clocked this quicker or reacted with more urgency than Jay Z. He articulated all of it with poetic precision in a freestyle verse delivered at a show in May 2015:
And I don’t need no middle man to talk to my niggas
I understand if you don’t understand, I figure I’m Jigga
That’s where we differ
I take what’s mine, you accept what they give ya, I get ya
I don’t take no checks, I take my respect
Pharrell even told me go with the safest bet
Jimmy Iovine offered a safety net
Google dangled around a crazy check
I feel like YouTube was the biggest culprit
Them niggas pay you a tenth of what you’re supposed to get
You niggas die for equal pay right?
You know what I’m worth? I ain’t ya slave right?
Jay didn’t merely recognize that artists were being exploited by tech companies and major labels — he saw an opportunity to rectify that injustice, to take some control of a system that controlled him. That’s why he acquired the Swedish company Aspiro for $56 million in March 2015 (an acquisition that had been in talks since January 2015), and relaunched their Tidal streaming service in the US just three weeks later.
That relaunch was accompanied by a bombastic ceremony, at which a diverse assemblage of stars lined up to show solidarity and sign a declaration of intent, publicly announcing some nebulous affiliation with Jay’s new sovereign state. Tidal was to be an artist-driven service, but more importantly, it was artist-owned. All the musicians standing alongside Jay on that stage — Alicia Keys, Win Butler and Régine Chassagne of Arcade Fire, Beyoncé, Calvin Harris, Chris Martin, Daft Punk, Jack White, Jason Aldean, J. Cole, Jay Z, Kanye West, Deadmau5, Madonna, Nicki Minaj, Rihanna, and Usher — were revealed to be equity owners of Tidal, each holding an equal share of the company.
Here, Tidal was theoretically mitigating the most dispiriting aspects of both the Spotify and Apple models. The shareholders whose interests were being served were not major labels or venture investors, but musicians. To the extent those musicians were being used to promote a tech company, it was their company. And for the most part, the tech aspect was secondary: These musicians weren’t helping to hawk smartwatches or video-streaming microconsoles; the product being sold here was music — so much so that Tidal offered a premium-tier subscription package in addition to its $9.99-per-month standard tier, offering lossless-quality audio for a rate of $19.99 per month, a price point roughly double that of most services’ standard fees (of course, most services don’t even allow for the option of lossless audio).
As Jay said in a bit of pre-recorded footage that accompanied the launch: “Right now they’re writing the story for us. We need to write the story for ourselves.”
On that stage, in that setting, Jay resembled not Zuckerman’s Wilbur, but another of literature’s most notable barnyard swine: Old Major from George Orwell’s Animal Farm. And Jay was surrounded by a cast of Snowballs and Napoleons, Squealers and Boxers. Jay’s verse even thematically recalled “Beasts Of England,” the song of freedom and rebellion written by Old Major around which Orwell’s revolutionary animals rally:
Soon or late the day is coming,
Tyrant Man shall be o’erthrown,
And the fruitful fields of England
Shall be trod by beasts alone.
Rings shall vanish from our noses,
And the harness from our back,
Bit and spur shall rust forever,
Cruel whips no more shall crack.
Sounds real nice, right?
Jay’s revolution was live-streamed, and its downfall came in similarly expedited real-time. In fact, Tidal’s Bolshevik uprising never even had the chance to get to its “absolute power corrupts absolutely” stage. Jay botched just about everything. As he told us long ago: He’s not a businessman, he’s a business, man — and here, that distinction proved his downfall.
Jay rushed the Tidal relaunch in an attempt to grab a slice of the pie while it was still warm, knowing that Apple Music would soon arrive to gobble up every last crumb. That was his first mistake: Tidal was buggy. It didn’t have a desktop app. The special features were sparse, and frankly, not all that special.
And then there’s the whole “lossless” thing, which, I mean … look, until those Silicon Valley guys get Pied Piper out of beta, the prospect of wirelessly streaming lossless media is a pipe dream. Lossless files are massive; streaming them is immensely costly on the delivery end, and requires a strong wifi or ethernet connection on the user end. Even to the extent it’s possible to stream lossless audio via one’s mobile network — even if one weren’t driven insane by the buffering times — doing so would absolutely devastate one’s data plan. And needlessly so, as there’s still no scientific evidence that the human ear can detect a difference between a 320 kbps MP3 and a lossless file. There are — right now, at this very moment — many Tidal users paying the premium rate for lossless audio while unknowingly listening to highly compressed “radio-quality” MP3 streams. That is, unless those users have manually reset their phone’s preferences to play “HiFi” audio rather than the service’s factory-default “Normal” files (96 kbps MP3s).
But Tidal’s fumbles extended beyond the product itself. At the launch event, Roc Nation CIO Vania Schlogel indicated that one of Tidal’s investment partners would be the telecommunications giant Sprint. However, three days later, Sprint issued a denial that any such partnership existed, saying that neither Sprint nor parent company Softbank had made any investment whatsoever in Tidal. Instead, Sprint’s spokespeople hedged with this wishy-washy bit of empty rhetoric: “We are working together in partnership [with Tidal] for the vision of the common cause of reestablishing the value of music, it is NOT a financial investment or exclusive partnership.”
Soon after the Tidal launch event, Billboard published an interview with Jay Z, in which he attempted to lay out some of the particulars of his vision. That too was a disaster. When asked if musicians would make more money from Tidal than Spotify, Jay answered unequivocally:
Even if it means less profit for our bottom line, absolutely. That’s easy for us. We can do that. Less profit for our bottom line, more money for the artist; fantastic. Let’s do that today.
That is not easy, though, for anyone. As far as royalty payouts are concerned, Tidal has absolutely no control over how much the artist receives. The entire royalty is paid to the label and the publisher, and those entities filter a percentage of what they receive to the artist — a fact Schlogel was forced to clarify almost immediately afterward. In the Billboard interview, Jay also outlined Tidal’s strange equity structure:
The founding members all got the same equity, and now we have a second round and everyone gets the same in that one as well, but it’s not as large as the first tier. We want to keep it going. We want to make this thing successful and then create another round and another round. That’s the dream, that’s the utopia. Everyone is sharing in it; everyone is some kind of owner in it in some kind of way.
The setup Jay was describing here sounded weirdly similar to a pyramid scheme — the same type of operation that landed Bernie Madoff in jail for 150 years. It’s hard to imagine Jay’s claim had been evaluated by anyone at all, much less vetted by Roc Nation’s lawyers.
Still, Jay sounded like Thomas Piketty compared to some of Tidal’s other ambassadors. In May, Jack White offered a defense of the service that seemed about as carefully considered as Donald Trump’s “something terrific!” alternative to Obamacare. (“Tidal is going to help a lot of artists out. I’m talking about the punk band that has 50k hits on Youtube and doesn’t see a dime.”) In September, the Arcade Fire’s Win Butler admitted that Tidal’s launch was “poorly managed,” but he stood by his band’s involvement, saying, “conceptually the thing that we liked about Tidal was that it’s HD streaming quality.” And, OK, sure: “conceptually” high-def streaming might seem attractive or meaningful, I guess, but again, “realistically” high-def streaming is another story. In July — only two months after Tidal’s big launch — Madonna did an interview claiming that reports of Tidal’s demise were greatly exaggerated:
It’s just the beginning, so we’re working out a lot of kinks and hopefully we’re going to build something unique and amazing that’s going to attract a lot of people.
The beginning, though, felt an awful lot like the end. Even Tidal’s wins came with caveats. In September, Tidal’s principals celebrated the service amassing 1 million paid subscribers — a number goosed somewhat by the fact that Aspiro had somewhere between 400,000 and 600,000 subscribers when Jay Z bought the company. In late October, Billboard ran a piece titled “Is Jay Z’s Tidal Possibly, Secretly A (Modest) Success?” The author played up comparative metrics in a competitive playing field, pointing out that Jay “paid $110 per subscriber, a fraction of Spotify’s $425-per-subscriber valuation at its last funding round.” The article featured a quote from digital music consultant Vickie Nauman, who sagely noted:
Tidal’s selling price was a bargain for a legally licensed and vetted ingestion engine, with multiple territory and currency support and an active recurring transaction engine. Regardless of the number of subscribers, the infrastructure is incredibly difficult to build, fraught with deep industry problems and complexity, and would take years to build from scratch.
All fair points. But if Tidal does wind up possibly, secretly a (modest) success, it will be only in limited financial terms, not broader philosophical ones. Unless Tidal can scale their operations (a terrible bet, in case you were thinking of making such a wager), its complicated infrastructure and not-insubstantial subscriber base would be most valuable to its shareholders as part of a sale to another, much bigger corporation: one that can afford to buy the service at an inflated valuation and absorb the substantial costs of scaling it (or packaging it as something else altogether).
There’s nothing today that suggests any cause for optimism. Tidal has already churned through three CEOs since its acquisition. Meanwhile, CIO Schlogel reportedly “left Tidal very quietly over the summer, just a few months after helping to present it to American audiences.” There are persistent rumors that Jay Z is courting potential buyers for the service — the most prominent name mentioned is tech giant Samsung, who might employ Tidal as their own version of Apple Music, tying it into the branding of their own iPhone-competing Galaxy devices.
For Jay, even considering such a deal must be an excruciating Hobson’s Choice. If he were, for example, able to sell Tidal at Spotify’s $425-per-subscriber valuation, he would make a gross profit of $369 million: a massive, undeniable win, as far as the bottom line is concerned. The greater cost of such a win, though, is incalculable. For one thing, no one on the outside is entirely sure how the founding members’ equity breaks down, but if they are in fact shareholders (and, let’s face it, they weren’t standing on that stage for fun), then they’re entitled to a percentage of any money made in the sale of Tidal. Depending on how Jay divided those shares, not to mention any additional outlay beyond his initial $56 million investment, it’s possible he’d still take a loss even if he managed to move Tidal for top dollar.
Those co-owners present a secondary snag, too: They presumably joined Jay’s revolution in good faith, and they might not be so eager to see their very public endorsement parlayed into the tech-world equivalent of a real-estate flip. But if Samsung (or Samsung’s equivalent) were to buy Tidal with plans to scale, would they do so without the explicit understanding that all the company’s artist-owners were on board in some capacity? Does Tidal’s pricetag drop if the service loses the imprimatur of Rihanna, Kanye West, et al.?
Forget about the owners — how will Tidal’s subscribers feel if Jay sells the service to a corporation such as Samsung? Many of those people bought into Tidal because they believed in Jay’s utopian vision. Would they feel betrayed to learn that they ultimately didn’t buy into anything except the opportunity to be sold to the highest bidder?
Even Jay would surely admit that such a deal represented only a short-term, small-scale gain. It would be like Old Major rallying the animals to liberate themselves from the harnesses, spurs, and whips wielded by Mr. Jones … only for those newly organized, energized, free citizens to look up and see their visionary leader selling the farm, for a tidy profit, to Zuckerman.
Jay’s miscalculations were legion. But perhaps his most grievous error was making a big move before identifying a substantial market segment that Tidal might claim for its own. The demographic Jay envisioned for Tidal included customers who fell into some shared space on this very specific Venn diagram:
• People who purport to care enough about music to pay for it even though free options exist.
• People who purport to care enough about sound quality to pay twice as much for lossless audio as they would for MP3 audio.
• People who draw some philosophical distinction between supporting a company like Spotify, valued at $8.5 billion, and a company whose TMZ-omnipresent artist-owners have a combined net worth of $2 billion.
And most importantly:
• People who meet the above criteria and are either not already subscribed to one of the existing streaming services or are willing to cancel their subscriptions to those services in order to sign up with Tidal instead.
The fact that Jay found some 500,000 customers who checked at least two of these boxes is no small feat. The prospect of him finding many more is grim at best. If he’d been more patient, though, he might have adopted an alternative strategy: not chasing music obsessives at all — because music obsessives make up a microscopic percentage of the wider market — but casual listeners who have yet to pledge allegiance to any service at all, who are prime targets for a service that caters to their own unique needs and idiosyncratic habits.
That’s been the strategy of streaming also-ran Rhapsody. In November, Rhapsody relaunched the long-dormant Napster as a Canadian-only alternative to the globally expansive likes of Apple Music and Spotify. The new Napster would feature playlists by Canadian artists, and would prioritize the country’s national identity in much the same way as does Canada’s federally regulated CanCon airplay requirements. Said Napster CFO Ethan Rudin, “It was important to us that we enter Canada with a personalized music experience.” Around the same time, Rhapsody launched its Rhapsody KIDS feature, a highly curated service that offers a “bright, easy, and colorful interface designed specifically for children” and encourages parents to “feel safe knowing what your kids are listening to.”
Will those sorts of hyperlocal initiatives pay off for Rhapsody? It’s too early to tell, although the service did just announce, per Billboard, that it had “grown its subscriber base by 45 percent over the last year, and now has nearly 3.5 million global subscribers in 34 countries.” (That makes it three and a half times bigger than Tidal, for anyone at home keeping score.)
Still, there’s limited upside in the Canadian market. As for Rhapsody KIDS, well … it’s not as though Rhapsody is alone in making a play for the mom demographic.
Who else is in that race? Here’s one example that might have crossed your radar: This past September, Apple Music premiered a TV ad during the Emmys broadcast; it was directed by Selma’s Oscar-nominated Ava DuVernay, and starred Scandal’s Kerry Washington, Empire’s Taraji P. Henson, and the Queen Of Hip-Hop Soul, Mary J. Blige, all of whom were shown hanging out, playfully cracking on one another, and dancing around while listening to songs on Apple Music. In November, Blige and Apple Music top dog Jimmy Iovine appeared on CBS This Morning to discuss the ad. Blige wisely sat to the side while Iovine tone-deafly sacrificed himself at the altar of capitalism. Said Iovine:
I always knew that women find it very difficult at times — some women — to find music. And this helps makes it easier with playlists, curated by real people. They’re not made by algorithms alone — they’re made by algorithms but with a human touch … I just thought of a problem, you know: Girls are sitting around, you know, talking about boys. Or complaining about boys, you know, when they’re heartbroken or whatever. And they need music for that, right? So it’s hard to find the right music, you know. Not everybody has the right lists, or knows a DJ or something.
We created Apple Music to make finding the right music easier for everyone — men and women, young and old. Our new ad focuses on women, which is why I answered the way I did, but of course the same applies equally for men. I could have chosen my words better, and I apologize.
It’s true, he could have chosen his words better … but would he have done so if it meant even momentarily diverting focus from the very particular audience he’d been granted and was desperately wooing in that moment? At CBS This Morning, the 62-year-old Iovine and the 44-year-old Blige sat across from Gayle King (age 60), Charlie Rose (73), and Norah O’Donnell (41), discussing a commercial starring Blige alongside Washington (38), and Henson (45), which was directed by the 43-year-old DuVernay. (Initially, Iovine admitted, he hoped to also include the 61-year-old Oprah Winfrey in the ad.) And CBS This Morning is a show consumed primarily by women with substantial discretionary income: a key demographic. As a September 2015 press release noted, CBS This Morning was “the only network morning news program to post year-to-year double digit percentage gains among viewers, women 25-54, and women 18-49.”
By making such a hard play for those viewers, Iovine was taking a calculated risk. He was hoping to win over a large number of people who fell into some shared space on this Venn diagram:
• Women who might be described as middle-aged and middle-class.
• Women who aren’t especially interested in actively seeking out new music but generally enjoy listening to music.
• Women who own iPhones but might not see the need to pay $10 a month for a fairly complicated music-streaming subscription service.
And most importantly:
• Women who might currently be satisfied with some combination of old CDs, occasional track downloads, the search-friendly YouTube, and the low-maintenance Pandora as their primary music providers … but might be convinced or coerced to try something new.
When Iovine touted Apple Music’s playlists as being “curated by real people … made by algorithms but with a human touch,” he was trying to tarnish and degrade Pandora, whose playlists are indeed “made by algorithms alone.” He was trying to make CBS This Morning viewers feel like Pandora wasn’t good enough for them. When he said “girls,” he meant “Women Of A Certain Age.” When he said, “I thought of a problem…,” he meant that he’d thought of a hook, an angle, a way in. He’d thought of a problem that didn’t exist.
When Jimmy Iovine said, “I thought of a problem…,” he meant that he’d thought of an answer. An answer to this question:
“What very large group of people is still available to buy my product, and how am I going to convince this very large group of people that they need to buy my product?”
When I saw the spot on CBS This Morning, I was reminded of something I wrote back in March, regarding something I’d witnessed back in 2013:
I sat in two meetings with representatives from Beats Music (this was before the service was launched at all, long before it was obtained for relaunch by Apple) and in those meetings, the Beats reps basically said that their goal for the service was to be as big as Netflix: Everyone and their mom had to be a paid subscriber. (They actually said, almost verbatim, “We need your mom to subscribe to this. This has to be a service your mom would use.”)
Three years later, the service formerly known as Beats — now just Apple Music; they officially shut down the Beats brand in November — is still trying to land your music-confused mom, even at the expense of possibly alienating the music-savvy women who’d already subscribed to the service (or riskier still, the music-savvy women who were still considering subscribing). But Iovine remains fixated on this demographic: the vast, untapped segment of the market for whom finding new music might not be a life-defining priority, for whom labyrinthine apps might feel like an unnecessary headache. If Apple Music was to become as big as Netflix, well, Iovine had hired Blige, Washington, Henson, and DuVernay hoping to replicate one of that service’s most well-circulated (if misunderstood) memes: Netflix and chill.
In his apology, Iovine said, “Our new ad focuses on women, which is why I answered the way I did.” That’s not exactly a lie, but it’s not a completely transparent explanation of the pitch being thrown on CBS This Morning. If Iovine were being honest, he would have said he was using that forum, and that specifically coded language, in an attempt to convert an influential, underserved demographic that hasn’t yet provided their credit-card information to any one on-demand music-streaming service.
If Iovine were being really honest, he would have said he was using that forum, and that specifically coded language, in an attempt to convert an influential, underserved demographic that doesn’t need on-demand music-streaming services at all.
It’s not hard to understand why the reptilian Iovine came across like a mansplaining toolbag, an altogether different sort of pig. Even if he’d better articulated the #notallwomen distinction he’d assumed was self-evident (or hoped not to be called out on) he was nonetheless cynically pandering in the hopes of picking the pocketbooks of our nation’s mothers. Coincidentally or not, the day after Iovine ate his shoe on CBS This Morning, Adele more subtly employed the exact same strategy to record-breaking results.
By now, everyone knows that the biggest album of 2015 has yet to be offered on any on-demand streaming service. Everyone knows, too, that 25 isn’t only the biggest album of 2015, but one of the biggest albums ever: It set a new record for most albums sold in its first week of availability; it became the first album ever to sell a million copies in two consecutive weeks. After its third week in stores, it had sold 5.19 million copies in the US alone, making it the best-selling album of any year since 2011 … when Adele’s last LP, 21, sold 5.82 million copies.
Earlier this week, Billboard did a story on the phenomenon, positing the following thesis: “How did Adele sell more than 4 million albums in two weeks? By captivating and energizing a ‘diaper-changing, lunch-packing’ female audience that most artists and labels typically ignore.”
That conclusion doesn’t account for Iovine’s pseudo-human attempt to captivate and energize the same audience, but it suggests that various segments of the industry are clamoring to claim ownership of the same customer base. Wrote Billboard:
[Adele] broke these records the same way Barack Obama and Bill Clinton won two terms as president: with support from women. According to a Nielsen study, 62 percent of Adele fans are women, compared with 59 percent for Beyoncé and 54 percent for Taylor Swift … According to Nielsen, most female Adele fans are 25 to 44, with children. And because Adele’s base is slightly older and significantly more female-skewed, her decision to withhold 25 from streaming sites (which skew male) wasn’t much of a factor, says [Nielsen analyst Dave] Bakula. “Only a small percentage of people buy a record if they can’t find it streaming — generally, they move on to something else. She’s an outlier of outliers because she brings in people who are not regular music buyers. Maybe they haven’t bought a record since Adele’s 21.”
Whether it’s Adele or Iovine, though, simply exposing and exploiting a market inefficiency is not the equivalent of building a sustainable product. Just as the (temporary) absence of 25 will do little to derail the expansion of on-demand streaming services, the attempts to build a musical Shondaland — to sell music to a segment of the population fundamentally uninterested in buying music — will do little to bolster the industry as a whole.
It’s empirically accurate to say that streaming grew in 2015, but some of that growth was belied by a widening disparity between haves and have-nots. As of June 2015, Spotify reported 20 million paying subscribers — double their May 2014 number — and Apple Music had allegedly amassed an impressive 6.5 million subscribers within a few months of the product’s launch. But onetime hopeful Rdio declared bankruptcy in November — after reportedly losing $2 million per month — and the service was acquired by Pandora, to be reconstructed as something else altogether. In October, longtime player Deezer killed its plans to go public, due to “tough market conditions,” and their IPO documents revealed net losses of more than $20 million per year over the three-year period from 2012 to 2014.
The aforementioned Rhapsody might emerge as an interesting under-the-radar third-party candidate, but its cleverly tailored demographic-specific tactics won’t have much time to gain traction. Right now, just about everyone is trying to get in this game, whether or not they have an angle to play. In June, rumors swirled that Facebook was looking into launching its own music-streaming service — and while Facebook noncommittally quashed those rumors soon afterward, it seems unlikely they’ll stay out of the action forever. Google Play may not be the best-known product on the market but it’s a perfectly viable option offered by the only other company in the world closing in on a trillion-dollar valuation. Meanwhile, the Google-owned YouTube is a streaming powerhouse, and this year, they launched a paid subscription service, too. Amazon Prime has 50 million subscribers in the US, and it could make significant inroads into the casual-listener music-streaming space in 2016. Pandora’s acquisition of Rdio was a necessary move in a long game that will eventually lead to the service offering on-demand streaming alongside its traditional streaming-radio functionality (the logistics are being worked out as we speak).
Behind the scenes, Apple tried to strong-arm Spotify into abandoning their free tiers. It didn’t work (in fact, it led to Apple’s practices being scrutinized by the Department Of Justice and the Federal Trade Commission), but Spotify is currently considering allowing some artists an opportunity to offer their work behind a paywall. In July, artist-friendly content hub Soundcloud announced plans to launch a paid subscription tier. Just yesterday, a panel of federal judges ruled that streaming-radio services like Pandora must pay higher royalties to labels and publishers starting in 2016. Leaving aside the question of whether artists other than Adele are making money right now, there is nonetheless a lot of money on the table.
Like Rdio, Tidal will almost certainly be sold and scrapped for parts — no conscientious investor could possibly see a scalable future there, and at some point Jay will have no option but to quit chasing good money after bad — but a serious buyer remains to be identified, and the way in which Tidal’s parts are disseminated will be crucial. Returning to what industry analyst Nauman said, the service’s inherent value is essentially unrelated to Jay Z. When some tech or telecommunications behemoth acquires Tidal, they will be acquiring “a legally licensed and vetted ingestion engine, with multiple territory and currency support and an active recurring transaction engine.” That corporation’s accounting team will have done a meticulous cost-benefit analysis, taking into careful consideration the fact that Tidal’s “infrastructure is incredibly difficult to build, fraught with deep industry problems and complexity, and would take years to build from scratch.”
And whoever buys Tidal will very likely be buying it not to compete with Spotify or Apple Music, but to offer something else altogether.
What that “something else” might look like is a total mystery at the moment. But it seems fair to say that streaming services as we know them will one day in the not-so-distant future be made obsolete and eventually extinct. In April, techno-utopian Steve Albini mused on this evolutionary inevitability. Said Albini:
Historically, every time there’s been a new technological progression, there’s been a new convenience format [for listening to music]. So the question is, is it possible for something to be more convenient than streaming? And the answer is obviously yes.
Albini envisioned the next link in the chain as being “a cheap app that autonomously searches for music from anywhere on the internet.” And maybe he’s on to something! Although let’s be clear: The type of service being described by Albini is exactly the type of service that today’s industry leaders are currently working hard to eradicate.
Right now, there is no such thing as “anywhere on the internet.” Content is being walled off mercilessly and haplessly (oddly mirroring another of this guy’s policy proposals) — and it’s being done not to protect artists’ rights, but to boost the visibility and value of the individual services, often at the expense of the artists (and always at the expense of the audience). Drake would’ve had his first chart-topping single with “Hotline Bling” if not for Apple Music. The Tidal-exclusive Nicki Minaj and Beyoncé video, “Feeling Myself” was massive, but just finding it was a huge fucking headache thanks to Tidal’s tireless whack-a-moling of the thing every time it popped up outside the castle gates.
And for every one person who subscribes in order to get a glimpse of what’s behind the border, countless others just bail, find something else to listen to, something else to do. As you may already be aware, the internet offers a lot of stuff to do. As Nielsen analyst Bakula said, “Only a small percentage of people buy a record if they can’t find it streaming — generally, they move on to something else.” It’s all subtly changing the way we experience music as a culture, as beautifully illustrated by New York Magazine music writer Lindsay Zoladz on the subject of Rihanna’s long-awaited eighth album:
what if ANTI has been on Tidal this whole time and the three people who are actually subscribers have been bumping it all year
— Lindsay Zoladz (@lindsayzoladz) November 23, 2015
But leaving aside the age-old question of whether content wants to be free, content creators would like to get paid. And while paywalls and proprietary agreements might slowly erode an artist’s visibility and influence — increasingly forcing music itself into deeper and smaller niche pockets — they sound pretty good when the alternative is hooking up with this fuckin’ guy.
Within 10 years, more than half of all rap/hip-hop music will be made exclusively for me. Don't worry–I will share some of it.
— Martin Shkreli (@MartinShkreli) December 13, 2015
(Note to Tidal: I said, “no conscientious investor.”)
Leaving aside, too, which type of free our content might want to be, it would be inadvisable to bet on any strategies for monetizing content that rely on keeping it contained. Which means we might yet see a service such as the one envisioned by Albini. If it were to happen, though, it would almost certainly topple the already unstable streaming economy, and leave both artists and labels attempting to identify revenue opportunities and clarify copyright laws.
So it goes, right? Last week, Pandora CFO Mike Herring said in an interview, “Steve Jobs eviscerated the music industry with the launch of iTunes and it’s been downhill ever since.” That might feel true, but it’s not. It’s not the whole truth, anyway. As Stephen Witt illustrated in his remarkable April 2015 New Yorker feature “The Man Who Broke The Music Business,” it was more likely the music industry that eviscerated the music industry. Jobs merely made a fortune cooking the delicious meats.
Even that reading, frankly, feels a bit facile. It’s probably more accurate to say that the easily accessible economic prosperity enjoyed by the music business in the record-store era was an historical anomaly, a bubble waiting to be popped. It was a beautiful animal, to be sure, but it was never meant to live forever. And while fattening the beast made it more impressive to behold, so too was it rendered slower, softer, more immobile, less able to fend for itself.
Or maybe Wilbur is the wrong analogy here. Maybe the famous pig that best exemplifies the music business today is not Zuckerman’s, but the unnamed boar in Lord Of The Flies: scrambling and squealing in terror, chased by a bloodthirsty, meat-hungry horde for whom limits, laws, and consequences have disappeared. Those things are remnants of an old, distant world; they don’t hold sway in this one. Here, now, all that matters is the hunt, the kill, the fire, the feast.