Today, in some enormous mansion, or perhaps aboard a private jet streaming towards a glamorous destination, Jay Z is sitting back and cracking a broad grin.
For in Cannes, Sony Music CEO Doug Morris just made the music mogul’s day.
On stage at the Midem Music Industry Festival, Morris spilled the beans about tomorrow’s launch of the much-anticipated music streaming service from Apple. And this is poised to have far-reaching implications for Jay Z’s’s own much-trumpeted, but struggling, Tidal streaming service.
Morris is surely an insider on this announcement, given that Sony Music’s participation would be essential to Apple’s plans.
Quoted by Venturebeat, Morris said “It’s happening tomorrow… What does Apple bring to this?… Well, they’ve got $178 billion dollars in the bank. And they have 800 million credit cards in iTunes. Spotify has never really advertised because it’s never been profitable. My guess is that Apple will promote this like crazy and I think that will have a halo effect on the streaming business… A rising tide will lift all boats… It’s the beginning of an amazing moment for our industry.”
He said “several times” that he prefers paid streaming services to ad-supported ones and enthused that the Apple launch would be a “tipping point” for the shift to streaming over downloads.
While details are scarce, the industry standard has been hovering around $9.99 per month. It’s been reported that the Apple service will include curated playlists and suggestions by well-known DJs and musicians.
This may therefore be the salvation of Jay Z and Tidal.
Tidal has been very late to the music streaming race. It has no free, ad-supported tier to whet users’ appetite before they plump for subscription; and with an expensive $20 a month ‘HD’ service plumped up with exclusive launches, some believe it could help a bigger swing back to piracy. Plus it looks like a bunch of incredibly rich musicians whining about not being richer.
But Apple may be about to throw it a life-line.
Apple is almost certainly going to bring in some very big names to curate the experience for users. It already has the much-respected former BBC radio presenter and DJ Zane Lowe who is known to be working hard behind the scenes on this very aspect. And if the curation service also pulls in the rapper Drake (as rumoured) and others, then that’s all the ‘access’ you need. Fuck Tidal’s exclusives.
Imagine for a second this idea: Taylor Swift joins Apple’s new streaming service and launches her presence with not only her own material but a selection of the best music and artists she’s listening to right now.
Imagine, instead of another U2 album, we get Bono’s picks of the best up-and-coming Irish rock bands? (Ok, just go with it for now, OK?)
Imagine, as well as some new material from Norman Jay, we get his picks of the best underground dance music tunes from the last year?
The launch of Tidal missed a trick. Users don’t want an Avengers-style line-up of artists all on one platform. They want to follow the tastes of their idols.
And that showed up Jay Z’s strategic mistake, but also how he can turn this into a big payday. Because he clearly isn’t really in this to win the streaming war, but just to get a huge fat liquidity event from Tidal.
Instead of working to make Tidal a unique experience, where these stars curate the platform, he’s built a beautiful walled garden and sat back, asking the two biggest players to instead buy the garden. This is like selling the artists back to their own records labels. HD listening isn’t there for “the kids”, it’s there to bolster the valuation of the service.
And from what we can gather, the word in LA is that even after Tidal’s PR disaster, Jay Z is still looking at acquisitions to bolster the valuation. He has the ability to drive major value.
The launch of Apple’s own streaming service will, perversely, increase the valuation of Tidal.
Remember, Morris said this will “have a halo effect on the streaming business… A rising tide will lift all boats.”
Apple’s streaming is good for Tidal because it will promote the whole idea to a much wider mainstream userbase.
Either Tidal will gradually win more actual customers, because Apple will be pushing the streaming model, OR Apple will acquire it for its roster of artists and switch them into being curators as well.
Could Apple just pick-off the artists? Perhaps, but in reality Tidal looks like a “Union for the 1%”, even though admittedly they have said they intend to open it up and make it usable by any/all who will join, not just a select group. But it’s all or nothing. And they all have a share in the sale. And Jay Z the largest share, no doubt.
Even if Tidal fails as a platform, its roster of artists and its streaming model will now dovetail with any competitor.
Plus, Spotify could take the role of saviour of Tidal’s rebellious artists but pulling off some enormous deal. Should it want to.
And let’s not forget the sleeping giant of YouTube, which Google could relatively easily flip into a full-blown streaming service, if it could get the product right.
Meanwhile, if David is Spotify and Apple is Goliath, Tidal is a soldier taking a random potshot from the sidelines hoping to attract attention.
Whatever happens, Jay Z is probably going to enjoy his breakfast this morning.