Rhetoric alone doesn't a powerful contender make. Real market opportunity come from deficits in existing market structure that are experientially real to music consumers, not just elite artists.
At some point last year, when it dawned on Pharrell Williams that 43 million Pandora streams translate to only $2,700 of royalties and when Taylor Swift pulled her music from Spotify, the idea of "turning the tide" must have become a really pressing concern.
And when Jay Z, Beyonce, Madonna, Rihanna, Kanye West, Chris Martin, Alicia Keys, Daft Punk, Deadmau5 and other heavyweights took their place on the stage this week, it smelled a little like a revolution. Streaming will never be the same as Tidal shifts ownership from middle-men back to the artists.
The idea sounds tempting: get a critical mass of elite artists together to build a dominant means of distribution. Two arguments motivate this move. First, artist compensation is unfair and content creators should receive a better deal. In Jay Z's words, let's create a solution where musicians and fans "all just camp out and listen to music." And second, conventional streaming services heavily compromise on sound quality but real fans are purists.
Let us examine these two arguments in greater detail.
Around 2000, I began studying structural changes in cultural creative markets using the then-unfolding war on music downloading as my context. Over the next eight years, I left no stone unturned. I explored the behavior of every institutional actor on the evolving music market stage, analyzed their language and actions, and dove deep into the last 300 years of music market history. One central takeaway from the resulting longitudinal study published in the Journal of Consumer Research is that these two arguments -- artist fairness and sound quality -- never resonate with consumers nearly as much as artists would like to.
The key lies in understanding how market institutions shape market actor roles.
Similar to how consumers will forever dream of free music and music executives will forever dream of the perfectly cooperative act, artists can spend entire days and nights in the studio or in a dressing room lamenting the contractual status quo. They like to dream up a world in which money-grabbing and quality-reducing middle men are cut out of the equation and consumers finally get to experience their true artistic intentions. For artists, and I have been one for a decade prior to studying market creation and customer experience design, fairness and product quality are two of the holy identity grails.
While the market itself always presents a shifting compromise between these and other stakeholder interests, sometimes the dreams can intersect. Such was the case circa 2003, when the Recording Industry Association of America's legal crackdown on Napster led to a radicalization of downloading consumers. For less than two years, downloaders stepped into the heroic cloaks of sonic warriors. They declared their excessive use of Kazaa, Bear Share and Lime Wire as necessary acts in the noble project of liberating enslaved artists from the shackles of industry oppression. Somehow, Jay-Z and company are hoping for the same consumer activist potential. But what's missing is this: a market situation that reduces consumers' perceived degrees of freedom, not just artists'.
Second, whereas artists define high fidelity in rigorous terms, consumer perceptions of quality are much more a matter of perceived meanings. They do not exist outside of market political considerations either. Consider, in this context, Craig Thompson and Zeynep Arsel's study of local coffee shop patronage (Journal of Consumer Research). As the authors write, "the patronage of local coffee shops provides a symbolic anodyne for the feelings of cynicism, alienation, disenchantment and disempowerment that could result from the increasingly ubiquitous presence of corporate influence in everyday life." In other words, while fans can get really excited about authentic, local coffee shops or high fidelity sound boutique, this desire requires a negative symbolic other which threatens to undermine the consumer experience.
In music market history, artists have often suffered from the circumstance that the consumer's love for fairness and quality is never unconditional. Consumers want to know just enough about the artist to draw inferences about their own values and identities. If this wasn't so, Mozart would have probably received a premium instead of a budget funeral and Metallica's anti-Napster crusade would have probably created fan enthusiasm instead of mockery. Like Metallica circa 2000, Jay Z isn't the first brand that comes to mind when thinking about the concept of "struggling artist." At this point, social media tide turns from revolution to "sell-out."
The Tidal story plays up an age-old lamento. Yet, real market opportunity comes from deficits in existing music market structure that are experientially real to music consumers, not just elite artists. Rhetoric alone doesn't make a powerful contender. And Jay Z may soon experience the limits of his own popularity.