Why Competition In The Music Space Is Great And Fragmentation In The Music Space Is Dangerous
Guest Post by Mike Masnick on Tech Dirt
The plan was unveiled on Monday at a brief but highly choreographed news conference in Manhattan, where Jay Z stood alongside more than a dozen musicians identified as Tidal’s owners. They included Rihanna, Kanye West, Madonna, Nicki Minaj, Jack White, Alicia Keys, the country singer Jason Aldean, the French dance duo Daft Punk (in signature robot costumes), members of Arcade Fire, and Beyonce, Jay Z’s wife.
So, we have all of these artists, taking on Dr. Dre and Trent Reznor who were the keys to Beats Music, which Apple is getting set to relaunch. Jay-Z is positioning Tidal as more friendly to artists — though that was also the marketing claim behind Beats, and then it failed to attract too many users, in large part because there was no free, ad-supported tier. Of course, it's one thing if you're one of those megastars listed above, who get some equity stake in Tidal, but what about every other musician? Is it really going to be that good of a deal for them? Jay-Z and crew insist they'll be paying better rates than competitors, but considering competitors still can't get anywhere near profitability, it seems reasonable to question if Tidal can actually make any money at all. It's one thing to say you're going to pay artists more. It's another to defy basic economics.
Tidal also has no free, ad-supported tier, but does have a more expensive $20 tier for higher quality sound, which may attract random audiophiles, but not much more than that. Indeed, the recording industry (and many artists) have been pushing back against the free tiers that already exist. Universal Music has been demanding Spotify cut back on its free tier. And Universal's CEO Lucian Grange has been using every opportunity to complain about "freemium" music plans. Now owned by Apple, Beats wanted to offer service cheaper than the standard $10/month and therecord labels said no.
And, of course, now Jay-Z is bashing free music tiers as well:
“The challenge is to get everyone to respect music again, to recognize its value,” said Jay Z, whose real name is Shawn Carter. “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.”
That's kind of nonsensical in a variety of ways. Every time we've heard people talking about getting people to "respect music again" or "recognize its value," the projects have failed (often miserably), because they're not at all focused on what music fans actually want. Rather they're focused ontrying to change the behavior of music fans and that's really, really, really difficult — especially when you're not really offering that much that's different.
But Jay-Z has a plan to get around that: exclusive deals.
Over the weekend, the Swedish blog Breakit reported — citing sources close to the deal — that Tidal’s plan of attack will be to ink first-window deals with the artists, where Tidal would get first releases of tracks from big-name artists ahead of any other digital streaming services. This would be exclusive, but only for a period: Spotify, Deezer and others would eventually also get these tracks, but only later.
At least they'll go up on other services later, but this seems like a dangerous path to go down. Again, rather than focusing on providing more value the focus seems to be on taking away valuefrom other services: ending free streaming deals and doing exclusives to fragment the market and make it harder for fans to actually listen to what they want, when they want it and how they want it.
That's the wrong lesson to get at this stage of the game. We've gone through nearly two decades of the recording industry fighting the internet at every turn, and now that we're finally starting to see some services that actually cater to what people want, the old industry players are jumping in and trying to kill the golden goose yet again. Any time any service shows that it can attract a lot of users, the recording industry tries to figure out a way to bleed it dry as quickly as possible, rather than helping it grow and building out more value for users.
More competition in the online music space is a great thing. But the trend towards locking stuff up, and taking away the value to music fans, while similarly jacking up the prices, doesn't seem like a productive path. It seems like one that is just going to annoy fans and push them back towards unauthorized alternatives.