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Penny Fractions: Issue 33 - Tidal Waves Come Crashing Down

Hi, I hope y’all are doing well this week. Of course the week I was going to something a little diffe
Penny Fractions
Penny Fractions: Issue 33 - Tidal Waves Come Crashing Down
By David Turner • Issue #33 • View online
Hi, I hope y’all are doing well this week. Of course the week I was going to something a little different with my newsletter Beyoncé and Jay-Z drop a new surprise, briefly Tidal exclusive, album. Needless to say Tidal, or the idea of Tidal, is the focus today. My email at pennyfractions@gmail.com is still open and if you enjoy this newsletter please recommend to a friend, colleague, or any interested parties.
Last note I’m sure when opening this email you noticed that Penny Fractions now has a logo. This was designed by the graphic designer Kurt Woerpel. You can check out Kurt’s website here, so def do that. Okay, let’s jump into another week of rambling about a niche music streaming service.

With no hints or teases on Saturday Beyoncé and Jay-Z released a collaborative album Everything Is Love. Despite being rumored since 2015, I’ll admit if this album arrived on every streaming platform I wouldn’t be devoting much time to the project. Of course that’s not how this went down. Everything Is Love arrived, at least for 36 hours, exclusively on Tidal.
Music streaming trends often mirror music’s own rapid fire shifts, where one business idea is introduced, copied, ran into the ground, and forgotten within a six month period—or with Spotify’s ‘Hateful Conduct’ policy not even a month. Three years ago before the launch of Apple Music rumors swirled about how much money Apple would throw around to get exclusive content on its platform. That speculation resulted in Apple Music doing artist partnerships with artists like Chance the Rapper and Drake, but also establishing the artist driven voice of Beats 1 with the likes of Elton John and Pharrell. Tidal to a lesser degree followed suit with major exclusive album promotion partnerships with Rihanna, Kanye West and Beyoncé.
Where Tidal grabbed exclusivity to single videos and albums, Apple Music particularly with Drake’s OVO Radio effectively signed him to a second record deal. The main difference is that instead of yearly album drops, OVO Radio became a weekly reason for fans to hold onto an Apple Music subscription outside of album release dates. I’ll say this certainly isn’t a new observation, but it’s one I do feel it a bit underappreciated. A reason it works is because Drake is a rare artist who is massively popular, but enjoys constantly engaging with fans. To Apple Drake isn’t just an artist; he’s a spokesperson, marketing icon, etc. The company real long term value in partnering with the rapper, where Tidal chose to value one-off releases to spike, not sustain, growth.
Now Tidal’s strategy long term of infrequent exclusive content isn’t how one builds a subscription business, rather it’s an adept way of doing marketing. The singer Frank Ocean effectively ruined Tidal’s business plan when he released Endless exclusively on Apple Music. The album release fulfilled his old record deal, he then immediately followed it up with Blonde his true sequel to Channel Orange that was on his own label. That pissed off Lucian Grainge, our current true streaming overlord and Universal Music Group CEO, and so the label swore off exclusives and the rest of the music industry followed suit. Meanwhile this provided a nice win to Spotify, who were ever so chatty about just how music exclusives aren’t good for fans or the industry throughout 2015 and 2016.
Spotify’s distaste of exclusive wasn’t because of artists or fans, but because true exclusives hurt its platform. The Swedish streaming company might be frustrated its users are on Tidal for a few days when Lemonade drops, but ultimately that’s not a major concern. No, instead the issue is when a major artists hold back music on the platform it creates small fissures on the platform. Now the sheer quantity of music means that it’d take an entire label to bail for most fans to notice a missing catalog, but Apple and Spotify not having a joint album by two of the world’s biggest artists is still less than ideal. (Just notice how Spotify isn’t playlisting Everything Is Love, perhaps because it’s a windowed exclusive…Spotify didn’t respond to comment when I asked this on Monday.) Apple Music might welcome back this form of competition but Spotify isn’t interested in moves that reduce its leverage over record labels. These brief moments show Spotify’s precarious leadership position.
(The last few weeks a number of stories are coming out about Spotify and Apple getting into publishing or offering artists deals. There is nothing being reported about these artists going exclusive with one platform or another, because ultimately it serves no one.)
Now why did Tidal surprise release Everything Is Love like this…then immediately put it on all other paid platforms? The obvious reason is that Beyoncé and Jay-Z are currently on tour and this is simply marketing promotion. The album’s statement may be one of togetherness, but economically it’s simply an ad for their On The Run II tour. If this was purely for promotional reasons just releasing it on Tidal doesn’t quite make sense. Tidal’s user base is much too small to waste a dual album—the app was barely in the Top 15 on the Apple App store even only 24 hours after the release. That’s why the album so quickly arrived on other platforms, it was a nice tease to flood the news with Tidal, after a month of bad press, but these two superstars aren’t about to waste so much potential capitol.
In 2018, Everything Is Love shouldn’t shift the conversation around Tidal, because it’s simply just another one off project that won’t promote any sustained platform growth. An interesting idea is that right now over the last month Kanye West dominated the musical conversation because he announced these five Wyoming projects that were going to release back-to-back and so far he’s held up his end of the bargain. That’s the kind of sustained event release schedule is one that from the outside would’ve been perfect for Tidal. This isn’t a single project one can pirate, but instead building up a listener habit that if one wants to participate in one of music’s biggest moments a Tidal subscription is required. Now of course the projects could arrive elsewhere after the weekend, but this could’ve been a much neater version of this approach.
The company appears to still be deeply struggling and this might’ve been the last real card they could’ve pulled to make people care about its platform. Maybe this move can sway a few more uninformed investors to put money into the company, but that’s a pretty dire situation to be in. I’ll keep banging this drum, but there can and should be competition in the music streaming market. However trying to find that differentiation with one-off exclusive projects isn’t a business plan it’s a marketing strategy. One that is already well past its prime.
A Little Promotion
I’ll just say if you’re at all interested in some rather in-depth history of Tidal, then check out my story “How Tidal Got So Fucked” that just went up this morning. There’s quite a bit to unpack in this piece, but I figured if I can circle back next week if there any loose threads I’d need to pick up. Enjoy and maybe learn a little bit about just how many people Jay-Z allegedly owes money to.
6 Links 2 Read
The clash between record labels and Spotify appears to be slowly heating up with these the reports of Spotify offering dealings to independent artists. There’s a lot of speculation brewing over this news story in a way that honestly surprised me a bit. Just because people appeared to jump ahead to Spotify signing the Drakes of the world. I mean wild speculation is the mantra of this newsletter, but I’ll hold back a bit and talk about this in a little while.
I’m a journalist and love gossip, so part of me really wonders who exactly is want this narrative of labels playing hardball with Spotify over India? Still putting aside my skepticism, this aligns well with a thought I’ve held for a little while: That when Spotify start to flex its power in western markets the response won’t be found in America or Europe. Nope major labels who already signed deals across every market on the globe will start acting tougher in places where Spotify needs to build up growth in the long term. In other words: India may be the really battle ground of Spotify and the major labels.
The answer to the headline is no. But, still a good article looking at demographic information about different streaming services and what kind of business opportunities and challenges places might face in light of what is in front of them.
Many articles have discussed the issues of fatigue and burnout that happen with Twitch streamers, but I find it so interesting to see the actual number bear out that if one isn’t constantly on the grind making content there is a drop-off.
If I had more time I’d really dive into this topic, but I’m but a single person doing a newsletter so I’m not sure when that’ll actually happen, but maybe I’ll hold myself to it. Sorry the last week was really great for music streaming/biz news!
I’m sure at some point this year I’ll write a piece about my nostalgic love of MP3s. Whenever I write that piece this is a nice little primer as to why the formats of my childhood are entering its final years…at least for now.
A music platform, in this case Sirius XM, got sued and settled after an audit revealed that they were properly compensating artists. Wow, interesting I wonder if that could happen with another music platform that is all of a sudden in the news and being investigated by international police. Perhaps, maybe, who can say for sure.
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David Turner

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