The economics are getting tougher.
If there’s one thing for certain, it’s that the economics of the music industry have dramatically changed. Recordings used to make artists a bundle; now it’s touring. Record labels used to control the industry; now it’s largely technology platforms. New music used to first appear on the radio and quickly follow on television; now the digital debut rules.
But what kind of digital debut? A pay-what-you-want download à la Radiohead’s In Rainbows? (It didn’t really work out.) A visual experience à la Beyoncé’s Lemonade? (It really did.) And what to make of trend-bucking strategies like Adele’s 25, which shunned streaming services (and singles) for physical album sales to lift an entire category? (It’s a good gig if you can get it.)
In short, the recorded music landscape in 2017 is complicated. But the digital dust is beginning to settle.
In Wired, Angela Watercutter writes that Shawn “Jay Z” Carter’s latest album, 4:44, which is available only on the Tidal streaming service (for which he is an investor) and to Sprint wireless subscribers (which owns a 33% stake in Tidal), may be the last music debut to limit itself to a single service or company. Sure, Drake’s Views and Kanye West’s The Life of Pablo and Beyoncé’s aforementioned hit achieved some level of recent success with the tactic. But once-aligned economic incentives are beginning to separate.
“Presumably, the original point of exclusives was to get listeners to sign up for new streaming services,” Watercutter writes. “In a world dominated by Spotify, a new album by Frank Ocean or Beyoncé was a reason to sign up for Apple Music or Tidal. For a while, that trick worked. But those albums always ended up on other services—or simply for sale as digital downloads—and by now most people have settled on their streaming platform of choice. Labels and services may still appeal to listeners with new albums from time to time, but as [music analyst Mark] Mulligan notes, even if exclusives are not dead ‘Jay Z is not going to put them back in good health.'”
We’ve seen this phenomenon elsewhere in technology: the telecommunications industry. Where Apple and other vendors once extracted princely sums for exclusively selling their devices through one (then two, then three) wireless carriers, the phenomenon didn’t last very long. Today you can buy an iPhone with or without a carrier. Competition in wireless telecom has returned to the old battlegrounds: coverage, price, service.
And so has the music industry. It is in the artist’s best interest to spread his or her work as far and wide as possible; an exclusive is a calculated risk to temporarily limit that for future gain. It’s in the streaming company’s interest to attract listeners to its service; short of Taylor Swift and a select few megastars, a given artist is unlikely to move the new subscriber needle relative to the price paid for exclusivity. Where the money flows, so goes the record label.
But Jay Z isn’t just any recording artist. He co-founded his representation/record label Roc Nation and co-owns the streaming service to which he promised exclusivity, Tidal. With the 4:44 deal, Sprint and Jay Z’s incentives are aligned: convince more people to sign up for Tidal and boost the value of the service and their stakes in it. Streaming exclusivity may not work for most artists, but it works for one that moonlights as an investor in the service in question. Because while recorded music is a nice business, technology is a better one.
Or as Jay Z himself once put it after rapping that he wanted a billion dollars: “Oh, what a feeling. F*** it, I want a trillion.”