Why Hov really pulled his music
Jay-Z is known as much for his business savvy as his talent behind the mic. Recently, however, his moves in the business world have been more about spite than strategy, or so it seems. As most probably know by this point the Roc Nation commander and chief ventured into the tech scene when he acquired Tidal in March of 2015 (Then called Aspiro). His acquisition of the streaming platform made perfect sense as music continues to be consumed digitally more and more each year. However, as big fish organizations like Apple also wanted a piece of the pie they simply out muscled the much smaller company. With Apple paying hefty amounts to land exclusive deals with artists and even funding music videos as they did with Drake, the benefits for artists to go with Tidal began to vanish. With streaming, artists only earn a fraction of what they did with physical sales and are looking to monetize any way they can. Now, soon after a hefty investment by Sprint, Jay-Z made another drastic move in this streaming war by removing most of his catalog from competing platforms. At a glance, this move seems to make sense as one would think this would make Tidal more competitive but after a careful comb through the facts, we see that this is hardly the case. The real reason for this move is something a lot more calculated than many realize.
Why he acquired Tidal
For a more accurate view of what Jay-Z truly hopes to accomplish, we must revisit his acquisition of Tidal and his true purpose for the streaming service. Long before 2015 the music industry was sinking, Mp3 files and digital downloads made music free and easily accessible for everyone. What this meant for artists was that they were creating a product that people wanted and were getting but weren’t paying for it. Rather than try to find a way to adapt to the digital age labels tried to fight it in hopes to get things back to normal. It didn’t work. Companies like Youtube and Spotify were letting users listen to music for free via streaming and paying the artists with money made from advertisements. Though people questioned whether or not this business model could be successful it gained enough popularity amongst music fans and soon commanded a following that could not be overlooked. Record labels were happy because they could now try and profit from this arrangement, but the artists were still being *coughs* shitted out of the deal because of outdated laws that I will discuss in another article. Enter Tidal. Jigga rolled out Tidal in 2015 with an army of top stars who were to be co-owners of the company with it. He claimed that Tidal was the platform for the artists. It created exclusive releases and even put music videos behind a paywall in an attempt to get artists what they truly deserve for their work.
This play seemed to go well as popular artists like Rihanna and Beyoncé dropped hit after hit and only to those who paid the Tidal monthly fee. However, things quickly turned sour. First megastar Drake backed out of a deal with Tidal in favor of a multimillion dollar deal with Apple music. A deal that proved to be extremely fruitful as the 6 god became the streaming god racking up unprecedented numbers with his exclusive releases and the popularity of his OVO sound radio. Then an even more crushing blow came to the industry as a whole when Frank Ocean dropped Blonde exclusively on Apple music for an undisclosed amount immediately after ending his contract with Def Jam through the release of Endless Love, a less than superior album. In response Universal, the home of Def Jam numbered the days of exclusive releases by banning the practice for all artists under the labels umbrella (in short all the popular ones).
Why Tidal wouldn’t really benefit
This catches us up with what’s going on now with Jay moving his catalog away from his competitors. Like I said above, this move seemingly makes sense as the much smaller Tidal would now be able to compete by continuing to offer TRULY exclusive content. But if we look at the numbers, we could conclude this move was a little too late. Jay is a big name in music but only through nostalgia. Nobody is streaming his music like they do his wife Beyoncé or Drake especially the content he had removed. Yes, he has a committed following who might switch services for this reason but it is not large enough to make a major difference even if all of them were to do it which they won’t. All of that coupled with the fact that he will lose income by doing this, we must agree that this was not a strong business decision if we look at it from that perspective.
We have to think!
I wrote a book recently, and in one of the chapters I discuss how solving a problem is sometimes about changing your perspective. If we shift our thinking away from what is laid out in front of us, we can see the clues that lead to another conclusion. That none of this was ever about winning the streaming war, it was and IS about ending it. As mentioned above streaming has killed a revenue stream for artists reverting their music into marketing tools rather than sole sources of income. Hov said himself of Apple music head Jimmy Lovine that he believes his tactics to be based on his competitive nature rather than a desire to better the music industry. This statement in itself reveals a lot about his mindset. He doesn’t give a damn about streaming because he knows more than anybody that there is no money in it; he is an artists and label head after all! He also knows the business and he knows that he can’t compete with his deep-pocketed competitors. What he can and likely is doing is causing disruption. The industry is broken, plagued by outdated systems and laws. Greed runs deep into the history of music which has just as much to blame (if not more for) its current state. If things continue down the path we are heading the artist won’t have a pot to piss in. By constantly shaking things up as he first did with the exclusives and now with removing his catalog, he is shaking up the security for consumers who rely on streaming. Imagine how subscribers would feel after paying a monthly fee only to be able to listen to half of the music the actually want to hear. It would soon become more convenient for people to ONLY pay for the music they want to hear. This would boost revenue for artists and keep fans in the loop with their favorite artist while killing off streaming which basically subscribers paying to rent music.
Another working theory is that he is boosting the value of Tidal for a possible buyout by one of his competitors. A buyout would boost the star power for any streaming service making it more appealing to consumers.
He knows what he’s doing
To attain the level of success Sean Carter has you have to be more than gifted or smart, you have to have vision. I believe that Jay has been able to maintain relevance in an industry where time is always ticking and competition grows daily by seeing into the future. He’s seen a lot and done a lot and by now knows everything about music, down to what the fans want. This move is only the catalyst to get things moving. I’m sure more (right owning) artists and labels will follow his lead. I’m sure streaming companies at this moment are attempting to lock up deals for pure exclusive deals trying to beat the curve. All this will do is drive away fans who just want to listen to what they want to listen to. Only time will tell if this ploy will work, however, and there is a limit to how much he can truly disrupt the market. But Jay is a businessman; he has looked at the angels and studied the mechanics. He knows what he’s doing but that doesn’t ensure that it will work. Having vision is good but with so many moving parts can anyone really predict an outcome?
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