Benner on Tech: Jay Z v. Spotify

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
Read More.
a | A

People are Talking About…

It was easy for business reporters to make fun of Tidal. Or at least to make fun of the Tidal press conference. We’re not used to events where people onstage are pants-less and the keynote speech is studded with Hendrix and Nietzsche quotes. I guess we’re uncool. When it was Madonna’s turn to sign a piece of paper and she mounted the table, you couldn’t help but think, “If there’s some sort of tech crash, this will definitely make it into the 60 Minutes video montage.”

Tidal is Jay Z’s musician-owned, ad-free music streaming service that’s being billed as a Spotify killer. (Kanye West, Madonna, Rihanna, Nicki Minaj, Jack White and Alicia Keys are among the many owners.) By the numbers I guess it could compete. Both cost $9.99 a month. Tidal users will have access to 25 million songs and 75,000 music videos, while Spotify listeners get access to more than 30 million songs. Tidal also has a (much-maligned) premium tier that costs $19.99 a month and offers better sound quality.

Bob Lefsetz is already writing the service’s obituary: “It’s dead on arrival. Just like Apple’s new music service. Because people are CHEAP! They love their money more than their favorite artists, never forget it.”

Fair. Spotify has 15 million paying subscribers, versus 17,000 for Tidal; and it offers a free service that draws in new users. Apple customers are so conditioned to pay for downloads that I think that the reborn Beats has a shot at success. That leaves Tidal floating in some liminal space, hoping that their fame will be a good enough marketing tool to get people to subscribe.

So Tidal’s an easy target.

But let’s not forget that these all-you-can stream subscription services all cost the same and offer basically the same thing to an audience that likes music, doesn’t have time to scour the Web for free or pirated versions and wants to be able to listen to it on and offline. (This audience, of which I’m a member, isn’t the largest in the world. More people spend time hunting around online or deal with YouTube’s crappy user experience in order to get something for free.) It’s practically frictionless to leave a service and sign up for a new one. You don’t lose any music. You were always only renting.

I’ll be loyal to whoever offers me the most for my $10. Period. I don’t distinguish between whether I’d rather give my cash to a rich musician or a rich tech dude. Buying anything is basically the process of giving money to a rich person to get something that I want. Today it’s Spotify. If Tidal’s schtick -- getting money into the hands of artists -- means the service gets a better selection of songs, and if the user interface isn’t a nightmare, then why not give my $10 to Jack White? Yeah, those are all big "ifs," and I have my doubts that any or all of them will come true. But if they do, it’s easy to switch.

Ventureland

Meerkat rode a wave of media hype to a big $14 million funding round and no one really uses it, says BGR.

Uber caught a break in France, reports the Wall Street Journal.

Steve Cohen, of SAC fame, has launched a venture arm called Honeycomb Capital, reports Bloomberg.

Social+Capital Partnership is raising a $150 million opportunity fund along with a $450 million third fund, reports PE Hub.

Bitcoin is finally getting some attention on Wall Street, according to the Wall Street Journal. CB Insights has a pretty good chart of all the startups that are disrupting the banks.

People and Personnel Moves

Sean Cassidy, a former executive at the Air Line Pilots Association and a former member of a Transportation Security Administration aviation-security advisory committee, joined Amazon to oversee “partner relationships,” the Wall Street Journal reports.

Companies

AT&T charges $70 for high-speed Internet in markets where it competes with Google, and it charges $110 in markets where it doesn’t have competition, reports Ars Technica.

Facebook  looks more like Disneyland everyday.

IBM is investing $3 billion over the next four years in a new "Internet of Things" division, reports CNET.

Tesla said it will announce something new next month, and Bloomberg reports that the stock soared on the news.

Security Watch

The GitHub hack was part a big Chinese campaign to crack down on GreatFire, which fights back against the country’s big firewall, Motherboard reports.

G20 Summit attendees’ passport numbers, visa details and other personal information was accidentally shared with organizers of the Asian Cup football tournament, reports the Guardian.

"Booth babes" were banned at the RSA conference. 

News and Notes

In dark web intrigue, DEA agent Carl Force and Secret Service special agent Shaun Bridges were accused of fraud and stealing about $1 million in bitcoin while investigating the Silk Road, reports Wired. The government also wants information on Reddit users as part of a federal investigation of the now-defunct online black market known as Evolution.

Sean Parker and Ron Conway are supporting a new Washington D.C. organization that will craft and champion centrist economic proposals, reports Politico

Our obsession with STEM won’t make us successful, argues Fareed Zakaria in the Washington Post.

You can complain about your boss on social media and not get fired, reports USA Today. Litigation aside, it’s still a really bad idea.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Maria Lamagna at mlamagna@bloomberg.net