Jay Z's Tidal: It's failing because nobody cares about artists.

A Lesson From Tidal: Nobody Cares About Artists, Especially Rich Ones

A Lesson From Tidal: Nobody Cares About Artists, Especially Rich Ones

Moneybox
A blog about business and economics.
April 23 2015 1:41 PM

A Lesson From Tidal: Nobody Cares About Artists, Especially Rich Ones

Jay Z
Sorry, Jay.

Photo by Emmanuel Dunand/AFP/Getty Images

Tidal, the new music streaming service from Jay Z, already looks like a wash. Less than a month after launching, it is sitting in the deep, subterranean reaches of the App Store's U.S. app charts, at No. 664. By comparison, Spotify, the leader in on-demand streaming, is the 17th most downloaded app in America. Beats Music, which is in the middle of getting a major revamp from owner Apple, is in 58th place. "Any hot new app will see a big drop in downloads after the hype from its launch dies down, but it doesn’t look like Tidal was all that hot to begin with," Gawker's Jay Hathaway noted Wednesday. "It briefly peaked at #19 overall before falling out of the top 200 less than two weeks later."

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate’s senior business and economics correspondent.

It's hard to pick out just one reason why Tidal is failing. You can start with its oblivious marketing message. The service promised to compensate musicians more fairly than its competitors, namely Spotify, which is known for effectively paying pennies per stream. But at its glitzy unveiling ceremony, the company shared few specifics about exactly how it would do so. Meanwhile, Jay Z was joined on stage by a phalanx of his fabulously wealthy pop-star friends, including Madonna, Jack White, Kanye West, Daft Punk, Rihanna, and Nicki Minaj, in a rather tone-deaf demonstration of solidarity among superstar entertainers (all of whom, it was revealed, owned equity in the project). As Death Cab for Cutie's Ben Gibbard put it, "I think they totally blew it by bringing out a bunch of millionaires and billionaires and propping them up onstage and then having them all complain about not being paid."

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But the problems go deeper than poor optics. Tidal is a paid service—it costs $9.99 for a basic package, or $19.99 for lossless, high-fidelity audio (which nobody but a few fanatics cares about). Unlike Spotify, there is no free, ad-supported tier to get users hooked. So, in order to attract subscribers, it needs to offer a truly superior service, or really press the moral case that Spotify is screwing over the industry. The problem is that there's absolutely no evidence fans particularly care about artists, at least as an abstract category of professionals. Sure, Nielsen has produced surveys finding that listeners will pay extra for exclusive content, which Tidal is offering. But the past 15 years of revealed preferences tell us that most people just want cheap access to as much music as possible. That's why piracy became a problem. That's why Spotify gained traction, despite the wailing of singers and songwriters about their paltry checks. As industry analyst Bob Lefsetz wrote a while back, people "love their money more than their favorite artists, never forget it."

Things are a bit different when we talk about how fans connect with individual artists. Amanda Palmer has succeeded at raising money from her rabid devotees on Kickstarter, while Patreon, a service that lets fans pledge a certain amount of money for each new piece of work their favorite artists produce, is showing promise. But that's the thing: We're talking about specific bands and musicians. It's a bit like the Nicholas Kristof principle in action.* Much in the way readers get more invested in the story of a single impoverished girl in India than they do in an abstract stat about the fate of the poor, people care more about a single beloved band than they do the nebulous category of struggling musicians. Likewise, as anybody in philanthropy will tell you, people are much more willing to give money when they know exactly how it will be used. And, to a lot of people, paying for music feels a bit like philanthropy.

It doesn't help matters that, in the end, it doesn't look like Tidal really is all that more generous, anyway. Whereas Spotify pays 70 percent of its revenue out to artists and rights holders, the Los Angeles Times reports that Tidal is paying 75 percent. If you think streaming screws your favorite band, Tidal is only going to screw them the tiniest bit less. Not that many of us care.

*Correction, April 23, 2015: This post originally misspelled Nicholas Kristof’s last name.