Comment Re:The next Tidal, from the sounds of it (Score 1) 45
That's why the comparison to Tidal is apt; Spotify and the others in the market weren't under developed or new to the scene, and Tidal's only way to make their presence known was star power and money. The problem is, when everything you've got hinges on those two specific factors making a difference, the stars themselves suddenly have the power. Agents start making deals, talent demands go up, and so on. The only way to keep improving is to keep bringing in more top-tier stars, but your revenue certainly isn't going to scale with the requirements for each new star you add.
I also suspect this is where the play count inflation/deflation topic comes in; you tell interested investors you made five million views this year, each artist asks for their cut, and it turns out that all 50 of your artists only made 10,000 plays each, because it's pay-per-play. This balancing act invariably topples, and the business model falls apart. The more money you sink in up front, the longer this takes.