Jay-Z’s Tidal Being Acquired By Apple? Spotify Could Be In Trouble

Apple Music, Tidal, and Spotify are the big three streaming services right now, with Tidal recently ramping up the competition with exclusive content for their subscribers. Though the competition is certainly high and has been for more than a year, Apple may be looking to make things just a little more difficult for Spotify.

The Wall Street Journal reports that Apple may purchase Tidal, which could certainly do wonders for their own streaming service, Apple Music. Tidal being acquired by Apple sounds like it could be a bit of a game-changer and points to the future of music streaming services, while also leaving all of the other competition behind in the dust.

But the deal is not close to being final; in fact, Apple and Tidal seem to merely talking, and this “may not result in a deal.” Jay-Z has shown himself to be a smart businessman, so one can imagine that if a deal is finally struck, it is going to be lucrative for everyone involved. However, even then, it sounds like there are things Tidal would still be able to hold onto that Apple could not access.

“It would have been boilerplate standard language in those agreements to say, ‘We’re granting you a nonexclusive license to use our masters, but you need our approval to assign those rights to any third party,'” Steve Gordon, author and entertainment lawyer, said. “They’re not acquiring Tidal’s rights to play music. They’re acquiring Tidal’s subscriber list.”

That certainly seems to put things in perspective. Another important factor to remember is Tidal being co-owned by a number of musical artists, singers, and musicians. Jay-Z, of course, and Jack White, as well as Beyonce and Kanye West; both of whom released extremely successful albums this year, exclusively on Tidal with Beyonce’s Lemonade and Kanye’s The Life of Pablo. If Apple acquires Tidal, would this mean Pablo and Lemonade will become available on Apple Music, as well?

Jay-Z's Tidal Being Acquired By Apple? Spotify Could Be In Trouble Nicki Minaj and Beyonce onstage in New York City. [Photo by Jamie McCarthy/Getty Images for TIDAL]“The ownership is tricky with Tidal because some artists who have exclusives are also part owners of Tidal,” said Catherine Moore, music business professor at New York University. “That doesn’t necessarily mean that Tidal owns part of their catalogs, but it makes it an interesting example.”

Prince is another artist who immediately comes to mind. Even before tragically passing away earlier this year, Prince’s music was available exclusively on Tidal and nowhere else. Some may wonder if his music will become available on Apple Music through this acquisition, but would Prince’s estate allow it?

“It would be a matter of whether the contract stated that Prince’s estate would have to approve any [license] assignment or not, and I imagine that it would because that’s a standard clause,” Gordon said. “Apple would have to do a new deal with Prince’s estate.”

In any event, if the acquisition happens, it will just be Apple and Spotify, leaving them the dominant music streaming services in the business. This could end up hurting labels because this would essentially cut the percentage of customers to whom they could license their content. Spotify and Apple could gain serious leverage when it comes to negotiating power, and that could be a big problem for the labels.

Is it too far-fetched to imagine a future in which Spotify and Apple Music completely replace music labels altogether? Only time will tell.

If Apple does purchase Tidal, and the two services merge, they will continue to step on the competition and could begin paying artists as little as they want. So it looks as if fans are just going to have to trust that Tidal won’t decide to begin paying artists less when it comes to their royalties.

[Photo by Jamie McCarthy/Getty Images for Roc Nation]