…In an already cluttered marketplace, with established players commanding massive user bases globally, including Spotify at 60 million users?
Fair pay for the artists and the music creators. “Everyone knows that the pay system is unfair to artists,” said Jay-Z “Everywhere else, everyone gets compensated for their work. Music is everywhere — you consume it every day, everywhere you go. The content creator should be compensated. It’s only fair.” You may recall Taylor Swift’s decision in 2014 to take her music elsewhere, out of Spotify allegedly because she did not want her music to be offered for free. Tidal’s co-owners agree, as they feel that other streaming services do not pay the artists properly.
The Business Model: Bloom or Bust
Tidal does not have a “free” option. It is a two-tier subscription system based on the quality of audio. At this time, there is no ad-supported option for brands.
Like any announcement frothy with fierce competition, critics are already skeptical about Tidal’s usage and longevity, as they’re asking users for $10/month for the regular subscription and $20 for “high definition streaming and exclusive content.” Specifically, Tidal’s parent company (Aspiro) reported 512K paying users, which is a sneeze, compared to the current streaming music behemoths. Spotify, for example, with 60MM users worldwide, and 25% on the pay model. Tidal is offering 25MM available tracks while competitors average ~30MM.
“They don’t have to lose for me to Win”
Digitas will monitor any erosion to the more established services including Pandora, Spotify, and SoundCloud. With this said, we don’t expect to see significant, imminent dent to these major players given the distance between Tidal’s user base and the more established players. And, while just a hunch, there may be a consumer backlash to the artist walled garden that is inherent in Tidal’s content model. Jay Z said, “I just want to be an alternative. They don’t have to lose for me to win.” Well, let’s see about that.
Tidal: In a Glimpse and a Glance:
– Tidal is the result of Jay Z’s purchase of streaming music service Aspiro for a cool $56Million earlier in 2015.
– Two-Tier Subscription based on audio quality (no free version): $20 per month for higher quality streams; $10 for standard digital audio.
– Offering exclusive access to some artists, challenging streaming services like Spotify (with 60Mil users; 15Mil pay)
– Tidal currently has 500K users.
– Majority of Tidal is artist -owned including Rihanna, Kanye West, Madonna, Nicki Minaj, Jack White, Alicia Keys, Daft Punk and Beyoncé.