After Tidal: five rules for the celebrity tech investors
Published 05/04/2015 | 02:30
It was the worst tech launch of 2015. It may even be the worst launch of the last 10 years.
For those who missed it, the biggest stars of pop music assembled in one press conference last week to launch Tidal, a music streaming alternative to Spotify that the rapper Jay Z recently bought. Tidal's main attraction up to now has been that it can stream music at a higher level of clarity ('definition' or 'resolution') than existing services such as Spotify or Deezer. To get this, it costs more: €20 per month instead of €10 per month for most streaming services.
But somewhere along the line, Jay Z thought that it would be a good idea to try and market the €20 per month cost as some sort of redistribution of wealth to musicians.
So he gathered Madonna, Kanye West, Rihanna, Coldplay, Beyoncé and a clutch of other megastars worth €100m each into one press conference to talk about factors of production and why artists like him should make more money from the music business.
It was an unqualified disaster.
What should have been a big step into high-definition audio streaming became an example of greed, narcissism and how bad celebrities are at launching tech businesses.
Instead of starting a conversation about better quality services, Jay Z has turned Tidal's brand into a product that makes the richest people richer, with no other real defining benefit. It will probably die within a year.
So what lessons can other would-be celebrity investors take from Jay Z's cock-up? Here are five basic rules to follow.
1. Learn from Kim Kardashian
The shallower your personal brand, the shallower your tech pitch should be.
One of the few unquestioned celebrity-tech crossover successes in recent years has been Kim Kardashian's 'Hollywood' app. It's a flighty game for teenage girls to pretend they're hanging out with movie stars and lets them buy virtual artefacts for their characters, such as clothes, via in-app purchases. It has reportedly made close to €100m so far, an absolute fortune for a smartphone app. Kardashian wasn't claiming any world-changing movement. She was selling an ego-driven exercise in escapism to teens. As brand-leveraging exercises go, it was spot on.
This approach doesn't always work, however, as Justin Bieber discovered with his flop selfie app, 'Shots of Me'.
2. Try to avoid sinking ships
One of the most awkward speeches at the Tidal launch came from Alicia Keys, the talented singer, who quoted Nietzsche in her endorsement of the ill-fated streaming service.
Keys has regrettable form in backing losers. In 2013, she agreed to become the high-profile "global creative director" of BlackBerry in exchange for a hefty sum. She came on board at a time when BlackBerry was all but washed up as a serious smartphone brand. Her tenure lasted six months, during which time she was caught tweeting from an iPhone.
3. Adopt the Bono portfolio plan
When Bono's Elevation Partners investment vehicle lost somewhere in the region of €300m in Palm in 2010, one US financial website dubbed the Dublin singer "the worst investor in America". But Paul Hewson stuck to his guns and the fund continued to invest in high-tech companies and start-ups.
Two years later, the U2 singer hit eight-figure gold thanks to a 2pc stake in Facebook that Elevation acquired before the social media giant floated. That, together with stakes in other firms such as Dropbox and Yelp, is a lesson for other celebrities looking at tech investments: pick a portfolio and stay the course.
4. Resurrections are difficult, even if you're Justin Timberlake
Just because you're a star, it doesn't mean you can make something cool again. Justin Timberlake has a lot of credibility across the music and movie world. But when is the last time you even thought of using MySpace.com, the once great social media site he jointly purchased for $35m four years ago?
5. The Robert Downey Jr exception
If you are going to associate yourself with a high-tech outfit, hedge your personal branding credibility by doing what actor Robert Downey Jr did: make sure that the ads are so obscure that you appear to be above success or failure.
For example, take a look at Downey Jr's series of ads for HTC, the smartphone company that is wobbling of late.
They're very abstract and slightly baffling. Downey Jr himself remains aloof: it's all a joke - no matter what happens to HTC.
Sunday Indo Business