WEBVTT X-TIMESTAMP-MAP=MPEGTS:900000,LOCAL:00:00:00.000 00:00:02.000 --> 00:00:04.521 BILLBOARD. THEY HAVE REALLY ONLY BEEN IN 00:00:04.521 --> 00:00:07.420 THIS BUSINESS FOR LESS THAN EIGHT WEEKS. 00:00:07.420 --> 00:00:11.390 IS IT PREMATURE TO SAY IT'S BEEN A DISASTER? 00:00:11.390 --> 00:00:17.840 EIGHT WEEKS FOR SPOTIFY OR HULU , AND WE HAVE SAID THEY ARE A 00:00:17.840 --> 00:00:27.209 SUCCESS? GUEST: THERE IS THE EXPECTATION 00:00:27.209 --> 00:00:33.250 THAT THEY SHOULD BE FREE. THE AVERAGE PERSON SPENDS $6 00:00:33.250 --> 00:00:38.250 YEAR ON MUSIC. THERE IS SOME MARKET FACTOR. 00:00:38.250 --> 00:00:43.250 ERIK: I WOULD ALSO ADD THAT NETFLIX AND HULU WERE CATEGORY 00:00:43.250 --> 00:00:49.292 CREATORS. T IDAL IS THE LAST MAN TO THE 00:00:49.292 --> 00:00:55.381 PARTY. STEPHANIE: IS IT? ERIK: THERE WAS NOTHING LIKE 00:00:55.381 --> 00:01:01.469 NETFLIX BEFORE IT. STEPHANIE: HE IS OPERATED -- 00:01:01.469 --> 00:01:03.417 OFFERING THE OPPORTUNITY TO GO TO THE SMALL, CURATED EVENTS. 00:01:03.417 --> 00:01:12.501 THEY ARE OFFERING CONTENT THAT OTHER PEOPLE ARE NOT. ERIK: 00:01:12.501 --> 00:01:15.501 YOU GO FROM FREE TO $20 A MONTH? STEPHANIE: THERE DOESN'T HAVE TO 00:01:15.501 --> 00:01:21.582 BE JUST ONE GAME IN TOWN. GUEST: BECAUSE PEOPLE WANT FREE 00:01:21.582 --> 00:01:29.584 CONTENT, THEY ARE PIRATING IT. AS SOON AS THE VIDEO GOES UP, 00:01:29.584 --> 00:01:33.586 IMMEDIATELY, PEOPLE ARE COPIED IT TO YOUTUBE. 00:01:33.586 --> 00:01:36.631 THEY HAVE BEEN TAKING IT DOWN HIM EASILY. 00:01:36.631 --> 00:01:41.668 EVEN JAY-Z'S CONCERT WAS STREAMED FOR FREE. 00:01:41.668 --> 00:01:50.750 THERE WAS NO INCENTIVE TO LOGIN. ERIK: WHAT ABOUT THIS IDEA THAT 00:01:50.750 --> 00:01:57.881 ARTISTS HAVE MORE CONTROL OVER THEIR CONTENT ON TIDA L THAN 00:01:57.881 --> 00:01:59.885 OTHER SERVICES. STEPHANIE: THEY GET PAID MORE. 00:01:59.885 --> 00:02:03.918 GUEST: THE BUSINESS MODEL IS AHEAD OF ITS TIME. 00:02:03.918 --> 00:02:10.917 WITH THE EXCEPTION OF JAY-Z AND MAYBE JACK WHITE, THE OTHER 13 00:02:10.917 --> 00:02:13.917 ARTIST STAKEHOLDERS DON'T OWN THE RIGHTS. 00:02:13.917 --> 00:02:18.917 THEY ARE STILL TIED UP IN RECORD COMPANIES. 00:02:18.917 --> 00:02:26.010 UNTIL YOU ARE YOUR OWN LABEL, THEY HAVE NEW SINGLES THAT CAN 00:02:26.010 --> 00:02:31.430 ONLY LIVE ON TIDAL FOR THREE DAYS UNTIL THEY GO TO OTHER 00:02:31.430 --> 00:02:34.470 SERVICES. STEPHANIE: THERE IS NO WAY DID 00:02:34.470 --> 00:02:39.131 THEY CAN PROTECT THIS? GUEST: THE RECORD LABELS ARE 00:02:39.131 --> 00:02:42.521 MAJORITY OWNERS IN EVERY STREAMING SERVICE. 00:02:42.521 --> 00:02:48.170 STEPHANIE: WOULD YOU AGREE WITH ERIC THAT THE EXPERIENCES AND 00:02:48.170 --> 00:02:51.927 THE CONTENT ISN'T ENOUGH FOR THE PRICE? 00:02:51.927 --> 00:02:57.294 ERIK: IT'S NOT WHETHER PEOPLE WILL PAY, IT'S WHETHER ENOUGH 00:02:57.294 --> 00:03:01.295 PEOPLE WILL PAY. THEY HAVE TO BE A HI-FI 00:03:01.295 --> 00:03:05.295 SUBSCRIBER. GUEST: WITH THE HIGH FIDELITY 00:03:05.295 --> 00:03:11.297 AUTO MARKET BECOMING MORE MAINSTREAM, THERE IS A LITTLE 00:03:11.297 --> 00:03:15.297 BIT OF A NICHE THERE. WILL THAT DRIVE 15 MILLION 00:03:15.297 --> 00:03:19.297 SUBSCRIBERS? ERIK: I WANT TO KNOW WHAT APPLE 00:03:19.297 --> 00:03:22.337 IS DOING WITH BEATS. WHAT KIND OF A THREAT DO THEY 00:03:22.337 --> 00:03:26.337 POSE NOT ONLY TO TIDAL BUT EVERYBODY ELSE. 00:03:26.337 --> 00:03:33.336 GUEST: APPLE HAS INCREDIBLE MARKETING SPEND AND BRAND POWER. 00:03:33.336 --> 00:03:37.336 WHEN THEY LAUNCH A NEW PRODUCT, THEY GO BIG. 00:03:37.336 --> 00:03:49.336 THEY SPEND $100 MILLION THAT FIRST MONTH. TITLE SPENT -- 00:03:49.586 --> 00:04:00.633 TIDAL SPENT MAYBE $10 MILLION. ERIK: COULD IT EXIST AND NOT BE 00:04:00.633 --> 00:04:04.633 A THREAT TO SPOTIFY IN TERMS OF CONTENT? STEPHANIE: WHY CAN'T IT 00:04:04.633 --> 00:04:07.633 BE A FAILURE AND JUST BE A NICHE PLAYER? 00:04:07.633 --> 00:04:13.753 GUEST: WHEN YOU GIVE EQUITY TO 16 ARTISTS, YOU DON'T ASK THEM 00:04:13.753 --> 00:04:20.797 TO PUT IN CAPITAL. STEPHANIE: ISN'T THAT THE WAY OF 00:04:20.797 --> 00:04:21.797 CELEBRITY NOW? ON A BUSINESS BUT WITH NO MONEY 00:04:21.797 --> 00:04:26.795 IN IT. GUEST: YOU CAN BUY A COMPANY FOR 00:04:26.795 --> 00:04:28.795 $56 MILLION, WHICH IS AFFORDABLE IN THE PRESENT SCHEME. 00:04:28.795 --> 00:04:40.795 BEATS GOT SOLD FOR $3 BILLION.