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Apple May Buy Tidal — and Your Data — but Not Prince’s Music

Or Beyoncé’s. And Jay Z is laughing all the way to the bank.

AP Images
AP Images

Jay Z is plotting his next takeover. The rap mogul/honorary baby boomer is in talks to sell his music streaming service, Tidal, to Apple, according to The Wall Street Journal. Jay used the crumpled-up bills in his dryer to buy the Swedish company for $56 million last March, then recruited his MySpace Top 8 to be co-owners.

The startup has suffered anemic growth, technical glitches, and a revolving door of executives in its first year within the Knowles-Carter empire. But 2016 has been sunnier for the streaming music service. Big exclusives from Beyoncé, Kanye West, and Rihanna have propelled Tidal beyond 4 million subscribers. The service is also the exclusive streaming home of Prince’s discography, which has garnered massive interest since the singer died in April.

The reversal of fortunes has made Tidal a ripe acquisition target. But if Tidal gets bought by Apple, does that mean all those Prince songs will immediately be available on Apple Music? Will the Lemonade short film immediately supplant any and all Taylor Swift content, now and forever?

Probably not without some extra haggling, according to music business experts. The high-profile deals that Tidal has brokered to net exclusives probably wouldn’t automatically transfer to Apple in the event of a sale. “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,’” says Steve Gordon, an entertainment lawyer and author of The Future of the Music Business. “They’re not acquiring Tidal’s rights to play music. They’re acquiring Tidal’s subscriber list.” The last major streaming service to fold was Rdio, and its sale to Pandora did not include licensing rights.

Gordon says exclusives like Beyoncé’s Lemonade are probably one-off deals that don’t lock artists into keeping their content exclusive to Tidal (or its next owner) forever. “Beyoncé doesn’t write down, ‘I’m going to provide Tidal with exclusive rights of anything that I do forever.’ It’s probably a case-by-case [basis],” he says. Tidal representatives have said that Lemonade will be exclusive to the streaming service “in perpetuity.” But Kanye West proclaimed that The Life of Pablo was a permanent Tidal exclusive earlier this year, only for it to wind up on competing platforms within months, seemingly at the whim of the artist or his label. (For the record, he also said his latest album would never end up on iTunes.)

As for Prince, who gained ownership of his most iconic work in a 2014 deal with Warner Music, it’s unlikely that he would have let anyone dictate where his music ends up via an acquisition. “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,” says Gordon. “Apple would have to do a new deal with Prince’s estate.”

The fact that many major artists are stakeholders in Tidal, including Prince, means they’d likely be predisposed to work closely with Apple in the event of an acquisition that nets them a huge windfall. When Apple bought Beats, it hired co-owner Dr. Dre as an employee and massively increased his fortune. Now his classic album The Chronic and his most recent LP, Compton, are exclusive to the service.

But ultimately, any artist (or their labels) with a smart contract would be able to dictate the terms under which their content landed on a competing service. “The ownership is tricky with Tidal because some artists who have exclusives are also part owners of Tidal,” Catherine Moore, a music business professor at New York University, said in an email. “That doesn’t necessarily mean that Tidal owns part of their catalogs, but it makes it an interesting example.”

While Prince is probably safe, it’s the lowly Tidal user who has no such flexibility: We’ve already agreed to give our personal data to any third party that buys the service. “If all or part of TIDAL is sold, merged or is otherwise transferred to another entity, the information you have provided on or through the Service may be transferred to such entity as part of that transaction,” the company’s data protection policy states.

Prince’s and Beyoncé’s work may be protected, but user data isn’t. Looks like Jay got us again.