Published on May 3rd, 2015 | by Lydia Brooks


Despite Tidal’s Woes, Jay-Z Could Still Take Over the Tech World

In 2013, streaming giant Spotify reported $1.03 billion in revenues, along with $80 million in net losses. Although they didn’t disclose their revenues for 2014, Mashable has calculated that Spotify could have made as much as $1.8 billion from their streaming services alone last year, a number which doesn’t include the additional money they make from ad sales.

Other streaming services are currently soaring as well: Beats Music recently cracked the top 20 of the U.S. iPhone top 20 revenue chart, while Pandora reported $218.9 million in revenue last year.

To Jay-Z, someone who has already made his mark in almost every area of the entertainment and sports industries (not to mention the world of politics), the message is clear: there’s money in streaming music. All he has to do is figure out how to claim his slice of the pie.

Tidal Wave or Tiny Splash?

According to the numbers, however, Jay-Z may have a hard time “forever changing the course of music history” with Tidal, as he claimed he would during the company’s much-criticized launch.

It seems that the monthly price tag of $19.99, as well as the lack of a free option, may be putting the service out of reach or many users. While the Tidal app sat at No. 4 in the iTunes music category and No. 27 overall on the day of its launch, it has since fallen to below the 700-mark on the overall iTunes charts, according to data company App Annie.

The first few weeks were so bad that Tidal has already fired their first CEO, and Kanye West even deleted all of the Tidal-related tweets from his Twitter account.

Hip-Hop’s Second Tech Mogul

Despite the apparent fall of Tidal, Jay-Z may still have a chance overtaking Dr. Dre as the biggest hip-hop player in the tech world.

Why? First of all, despite the fact that, as of April 2015, Tidal only had 540,000 subscribers (compared to Spotify’s 15 million), Tidal is far from dead.

While Spotify was recently valued at $8.4 billion, Jay-Z paid a mere $56 million to acquire Swedish company Aspiro, which gave him ownership of both Tidal and WiMP, another subscriber-based music streaming service. According to calculations from Forbes magazine, Jay-Z only needed 94,000 subscribers to cover the price of buying Aspiro. So with 540,000 subscribers on Tidal, plus another 580,000 on Wimp, Jay-Z has already made the purchase worth his while.

The second factor to keep in mind is that Jay-Z has already proven he can launch successful tech ventures, such as his partnership with Samsung, in which the company gave away 1 million copies of his album “Magna Carta Holy Grail,” paying Jay-Z $5 per copy (or $5 million), as part of a larger deal between Roc Nation and Samsung valued at $20 million.

New School Plutocrats

Almost every review of the Tidal launch was negative, with most critics taking aim at the star-studded, Avengers-like crew who gathered to rep the new service, saying that the music industry mega-stars (including the likes of Kanye West, Nicki Minaj, and Rihanna) came off as totally “out of touch” with musicians and music fans. In fact, musicians themselves, including members of Mumford and Sons, have taken aim at the service, with Mumford’s Winston Marshall calling the Tidal crew “new school [expletive] plutocrats.”

Ironically, it could in fact be these “out of touch plutocrats” who end up turning Tidal around. On April 23, news surfaced that Jay-Z and Beyoncé were planning to release a new collaborative album exclusively via Tidal. This type of start power could get millions more subscribers turned on to the service, but only if the company can manage to keep their “exclusive” releases from leaking elsewhere. So far, their first two exclusives – Rihanna’s “American Oxygen” single and Beyonce’s “Die With You” video – were both leaked within minutes of their appearance on Tidal.

The bottom line is, $56 million is a bargain to someone with a net worth of over $550 million, and Jay-Z has proven time and time again that, if he’s set on conquering a new business venture, he’ll find a way to do it.

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