Bloomberg Business Explains Why Jay Z’s #Tidal Is Failing


Jay Z‘s new music streaming service Tidal has been under harsh scrutiny from the press and general public since its inception.

Since launching the Spotify and Youtube competitor, Tidal hasn’t received the success that many had expected.

A writer from Bloomberg’s Business Week shared some insight on why Jay Z’s Tidal music streaming service isn’t performing as well as the hip hop business mogul would have hoped for.


Via: Bloomberg

The backlash was immediate. Tidal’s detractors weren’t just the predictably vexatious music bloggers, who described the service as little more than a vehicle for musical plutocrats to line their pockets. The haters also included some of Jay Z’s peers. “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,” said Ben Gibbard, lead singer of the indie rock group Death Cab for Cutie. The habitually caustic Noel Gallagher of Oasis told Rolling Stone, “Do these people think they are the f—in’ Avengers? They are going to save the f—in’ [world]?” In late May Tidal hovered at No. 9 on the iTunes list of top-grossing music apps, trailing Slacker Radio.


So what is Jay Z thinking? He turned 45 in December. The onetime street hustler is now a husband and a father and hobnobs with world leaders such as President Obama and Nicolas Sarkozy, the former president of France. Some say he has grander ambitions in middle age. “He’d like to be a billionaire,” says Rob Stone, co-founder of the Fader, a magazine that extensively covers the rap world. “He’s talked openly about that. But I think in his mind, it’s no longer just about how much money he’s making. It’s about his legacy and what the name Shawn Carter will mean after he’s gone.” He wants to save the music industry from the brutal economics of streaming—and make himself a fortune in the process. So far he’s doing neither.


It appears that Tidal not only has a public image issue, but money Concerns as well:

When he acquired Aspiro, the change of ownership meant he had to renegotiate its streaming contracts with the three major record companies: Universal, Warner, and Sony Music Entertainment. Universal distributes the records of some of Roc Nation’s artists, so Jay Z was able to quickly reach an agreement with that company. But music industry people who are familiar with the negotiations and forbidden from discussing them publicly say that Sony and Warner are asking Tidal for large advances in return for the right to feature their artists’ catalogs. (None of the record companies would comment on Tidal.) A source close to Tidal said that the company’s financial condition is fine and that it reached a streaming rights deal in late May with Warner.


Nonetheless, if Jay Z can’t come up with the cash for Sony, he faces the possibility that Tidal might lose albums from some of its co-owners, most painfully Beyoncé, a Sony artist. “I’m pretty sure most of the artists that were at the press conference don’t control their own streaming rights,” says Peter Mensch, co-founder of Q Prime, the talent agency that manages the Red Hot Chili Peppers and Metallica.

To keep his company from becoming a money pit, Jay Z also needs to line up many more Tidal subscribers. Tidal claims to have 900,000 users, but analysts suspect many have signed up for trials and will cancel when they have to start paying. Early on, Jay Z called some of his customers to see how they liked Tidal—a humbling act for a guy who calls himself J Hova (as in Jehovah). Tidal also hasn’t denied rumors that he will release a long-awaited album with Beyoncé exclusively on the service.