It was a short-lived vow. On Friday
-- after just 6 weeks -- West put the full album on Spotify, Apple
Music, Google Play, and even SoundCloud. In the past, on the issue of
exclusivity and when periods of exclusivity end, Tidal has said that it
supports whatever way its artists want to distribute their
content—exclusive to Tidal or not.
That sounds supportive indeed, but
make no mistake: this is not a good look for Tidal, which scored mega
buzz (and 400 million streams, 250 million of them in the first 10 days)
by holding the album exclusively—buoyed by the artist’s insistence it
would never be heard anywhere but Tidal. If there were West fans who had
signed up for Tidal specifically to hear “The Life of Pablo,” they’d be
justified in being aggravated.
West’s change of tune is unfortunate
timing for Tidal, which otherwise had a big week of positive news. The
service launched exactly a year ago, after Shawn Carter (Jay Z) bought
the Swedish "lossless streaming" company Aspiro, which owned Tidal and
WiMP, for $56 million. For its one-year anniversary, Tidal released
numbers on its base (Tidal had never shared such figures, apart from
unofficial numbers in a few Jay Z tweets). Tidal says it now has 3
million paying subscribers (unlike Spotify, Tidal has no free option)
and, most notable of all, claims that 45% of them (about 1.4 million)
pay for the pricey $20-per-month “HiFi” version.
If Tidal has 3 million subscribers,
it means Carter has added at least 2.6 million new customers since
buying the service, if not more. Aspiro had told him it had 540,000 at
the time of sale. That claim is now the subject of a lawsuit by Carter,
who is suing the Norwegian tech company along with its biggest
shareholders, Schibsted Media Group and Verdane Capital. In a statement,
Tidal said, “It became clear after taking control of Tidal and
conducting our own audit that the total number of subscribers was
actually well below the 540,000 reported to us by the prior owners. As a
result, we have now served legal notice to parties involved in the
sale.” A spokesperson for Schibsted told
a Norwegian news outlet that Aspiro was publicly traded when it was
acquired, and thus was subject to the “transparency of financial
reporting. Otherwise we have no comment.”
The lawsuit filing was yet another
piece of news about Tidal in a week full of Tidal news. Whether it was
good or bad news depends on perspective. A salacious lawsuit typically
comes with bad optics, and this one doesn’t make Carter look like the
most savvy businessman, if he was truly duped by Aspiro. On the other
hand, if the suit’s claim is true, then Tidal added even more than 2.6
million new subscribers in just one year.
Tidal is still far behind
Spotify (30 million users) and Apple Music (11 million), but adding 2.6
million new users in a year is encouraging progress—it has certainly
destroyed the meager 100,000 subscribers Beats Music had when it sold to
Apple. (Dr. Dre still has the better bragging rights for now, having
sold to Apple for $3 billion.) Of course, the company, according to
sources, believes it is myopic of media outlets to compare
Tidal right now to the existing competition. The fairer comparison, the
company reasons, would be to look at the subscriber numbers of
competitors when they had been around for just one year, not their
current subscriber base.
Carter made the same argument
in a tweet just one month after Tidal launched. “It took Spotify 9
years to be successful,” he wrote.
One
could debate that figure, but his point isn’t wrong—even the star power
of Jay Z, Kanye West, and Beyonce isn’t automatically enough to match
incumbent giants after just one year. But if Tidal can keep up the
progress, and keep scoring exclusive albums, it could more than double
its base in year or two. It will have to do at least that well to keep
up with Spotify and Apple, which will also keep growing—the market for
these services is getting crowded, not unlike the pool for dating apps.
In addition to boosting
subscribers, Tidal signed up even more artists to its star-studded
roster of equity owners. At launch, Tidal had 16 artists or groups, each
with a 3% equity stake: Carter himself, West, Beyonce, Rihanna, Nicki
Minaj, Usher, J Cole, Alicia Keys, Madonna, Jason Aldean, Arcade Fire,
Daft Punk, Deadmau5, Calvin Harris, Chris Martin of Coldplay, and Jack
White. (Drake jumped ship for Apple Music at the last minute.) Now it
has added four more artists: Damian Marley, Lil Wayne, Cliff "T.I."
Harris, and the French band Indochine.
Tidal’s press release on
Thursday morning, which touched on all the different news of the moment,
was headlined, “TIDAL’S SUCCESSFUL FIRST YEAR…” Indeed, by many
measures the service had a successful first year. Three million
subscribers is good news. More big-name artists coming on board is good
news (it means more exclusives from those artists). Suing the original
owner for misrepresentation could prove good news.
But
one of the founding artists, and arguably the biggest or
second-biggest, changed his mind and put his album on all competitor
platforms after less than two months. That was bad news, and it
undermined a big week for Tidal. It was a smart move for West, who gets
his album out there to the masses after keeping it under lock and key for six weeks. But for Tidal, it hurt.
No comments:
Post a Comment