Its struggled to compete with the likes of Spotify, Jay Z pretends its not his, and it has relied on three big releases. So whats the attraction for Apple?
The image of a buttoned-down Tim Cook kicking the pimped-out tyres of Jay Zs most expensive vehicle may seem an anomalous one, but according to the Wall Street Journal it could actually happen as the Apple CEO considers making a bid for the music streaming service Tidal.
While still at the speculation stage, it initially reads as counterintuitive. Why would Apple, whose own Apple Music has gone from a standing start a year ago to 15 million subscribers, want to buy a service that is a fraction of its size? Tidal claims to have 4.2 million subscribers, but there are questions as to how many of them will stay the distance as they were hooked in with a hat trick of exclusives this year from Beyonc, Kanye West and Rihanna, plus holding some of Princes back catalogue. As Apple has proved with the iPod, iTunes, the iPhone and the iPad, its skill lies in taking existing ideas and products, perfecting them and catapulting them into the mainstream. The history of Tidal would suggest it is in desperate need of being perfected.
Originally launched in Scandinavia as WiMP, it was a niche but well-regarded service whose parent company Aspiro was acquired by Project Panther, an investment group fronted by Jay Z, for $54m last March. Its public launch as Tidal was a ludicrous carnival of megalomania, where Jay Z wheeled out his famous friends including Madonna, Daft Punk, Rihanna, Drake and his wife, Beyonc to sign a declaration saying they would support the service and give it exclusives. They also got equity in the service as part of the deal.
This folly of a launch proved an omen for how things would subsequently play out. Madonna immediately premiered her video for Ghosttown on live-streaming app Meerkat instead of Tidal. After that, Drake defected to Apple, which bankrolled his Hotline Bling video and he returned the favour by giving Apple Music the initial exclusive on his Views album in April this year. In October, during a trial relating to sampling on his Big Pimpin track, Jay Z was asked to list his business interests. He failed to mention Tidal and when it was brought up said, Yeah, yeah. Forgot about that.
On and on the calamities barreled. Its first big exclusive in 2016 was Rihannas Anti in January, but it went live early, was pulled, then reappeared with Samsung bankrolling 1m free downloads of a release that was supposed to promote streaming. In February, Kanye West put his The Life Of Pablo album on Tidal, saying it would be never be available anywhere else. That lasted until April when other services got it. Some stability returned later that month with the release of Beyoncs Lemonade, which was a genuine event, but there was a growing sense that Tidal was turning into the punchline to a gruesome joke. That could all have dented its value, and perhaps Apple now sees an opportunity here where others see catastrophe.
After so many public disasters, why would Apple, given its obsession with control, want to buy something that looks increasingly less like a Porsche and more like a clown car?
The first and most obvious reason would be to bulk up its market share and close the gap on Spotify, with its 30 million paying subscribers (out of 100 million total users). But that is a short-term solution, a bit like hailing a taxi for half a mile at the start of a marathon. The longer play would appear to be around getting access to some of the biggest artists in the world and persuading them to back Apple Music and not, plucking a name out of the air totally at random, Spotify.
This is not unchartered territory for Apple, as it proved with its $3bn acquisition of Beats in 2014, which provided the chassis for what was to become Apple Music. Its strategy there was as much about buying talent as it was about buying technology, as with Beats came the addition of Dr Dre, Jimmy Iovine and Trent Reznor to Apples team. This time it could scoop up many of the biggest names in pop in one move.
Spotify has suffered publicly in the past from attacks by artists like Thom Yorke and Taylor Swift while Apple has, ever since the massively misjudged step of trying to offer three-month trials to Apple Music without paying royalties, been conducting a charm offensive among the artist community. Buying up Tidal, which has been trying to brand itself as the artist-friendly streaming service, could immediately give it the ears of the biggest pop stars on the planet. Plus, they will all, because they have equity in Tidal, get a windfall which was clearly always the end goal with Tidal and will only further sweeten any deal with Apple.
Tidals value is perhaps not as high at this stage as Jay Z envisioned for it but, like opportunistic couples with limited DIY skills buying dilapidated houses to quickly flip them, he perhaps is admitting to himself that he can only take it so far. The streaming market is incredibly tough, with Rdio collapsing last year and everyone else running up huge debts as they burn through their funding. Jay Z and his friends might get their payday, but Apple will get the celebrity ammunition it hopes will crash Spotify out of the race.
The exclusives to date on Tidal have felt, primarily because of its small market size, like damp squibs. However, with Apples enormous marketing budgets behind them they could shoot into the sky like the Fourth of July fireworks while, in the corner, Spotify sits glumly holding a sparkler.
Read more: https://www.theguardian.com/music/2016/jul/01/apple-buying-tidal-jay-z-beyonce-music-streaming
