POLLS: Is TIDAL the New Wave in the World of Streaming Music?

When the news first surfaced that JAY Z was acquiring Aspiro, a Swedish tech company behind streaming services TIDAL and WiMP, it was clear that the rapper-mogul had something bigger in mind than just a smart investment, but it wasn’t clear exactly what. Fast forward to a few weeks ago and thanks to star power, some serious social media buzz, and a series of epic teaser videos, the hype around the rebranded TIDAL was officially real. The social media campaign hinged around the hashtag #TIDALforALL, with celebrities such as Rihanna and Kanye West tweeting about “turn(ing) the tide” and “making history,” leaving it open to interpretation about what was to come. Was it a newer, more open service with greater selection and customization options? A platform to connect fans and musicians in a way we’d never seen before?

When last week’s announcement happened, however, it left many scratching their heads, and not just because of the spectacle of the conference itself – which combined the solemnity of a government ceremony with Madonna draping her leg over a table and Alicia Keys quoting Nietzsche, among other oddities. Along with Madonna and Keys, JAY Z was joined on stage by Beyoncé, Kanye West, Rihanna, Nicki Minaj, Deadmau5 and Daft Punk, among others, with Keys explaining that these artists were coming together to fight “technology companies” as the world’s first fully artist-owned company which would “reestablish the value of music” and put the power back in their hands.

Underneath all the pomp and circumstance, the gist was this: TIDAL plans to charge a higher subscription fee, with the added value for the customer being greater sound quality and access to exclusive content, while at the same time paying artists greater royalties on each stream. Each of the “owners” then stepped forth to sign a declaration in the name of the movement. Perhaps the best metaphor for the whole affair comes in the extended version of one of the promotional videos; dramatic voice-overs praising the value of art and the ego-less nature of the project are spliced in with footage of the multimillionaires who are behind it, celebrating their bright financial futures and their triumph over evil technology companies by toasting champagne (probably Ace of Spades) in crystal flutes.

The “announcement” didn’t announce anything new. It was essentially an event where the world’s richest artists tried to convince us to sign up for a service that would make them richer, and asked us to believe in a “movement” of which the biggest beneficiary is the artists themselves. The social media chatter quickly went sour, with consumers accusing TIDAL of masquerading a commercial venture under the guise of an art-focused social cause with its #TIDALforALL messaging. The biggest low blow for most users is that the monthly fee for TIDAL’s HiFi package is twice the price of Spotify.

One has to assume that the references to “technology companies” were direct digs at Spotify, which has quickly become the world’s most popular streaming service with over 60 million worldwide users, 15 million of whom are paying and the remainder who use the ad-supported, free version. It’s also the most vilified by artists it seems, with the bad rap reaching a fever pitch when Taylor Swift famously pulled her entire catalog from the service late last year. While Spotify pays about 70% of its revenue to labels (which will amount to about $1 billion this year), that breaks down to less than a penny per play, and that’s just the money that’s going to the labels, not the artists. But is it really that bad? Let’s take a look at Kendrick Lamar’s new album To Pimp a Butterfly, which broke the Spotify record for most plays in a day recently with 9.6 million. Newsweek estimated those single-day streams earned between $921,600 and $1,290,240, and that was just in a single day. Combine that with what he made for the 324,000 albums he sold in his first week, and you can see how the two mediums have potential to work nicely in the artist’s favor. He might have been paid higher royalties through TIDAL, but considering that a large portion of those 9.6 million spins came from users of Spotify’s free service — something that TIDAL doesn’t offer, period — it’s doubtful his music could have had the same overall reach and impact. And who knows how many of those 9.6 million plays led to someone going out and copping the physical album.

Now that the dust of the initial “announcement” has settled and we are beginning to see TIDAL take shape, we can take a more objective look at the scenario. TIDAL currently offers two pricing tiers. There’s the $9.99 a month TIDAL Premium plan, which is a competitive price point to Spotify Premium, but actually offers lesser sound quality, so the one that TIDAL will be pushing is its HiFi package: for $19.99 a month you gain access to 320 kbps (AAC) and to FLAC 1411 kbps – lossless (16 bit/44.1 kHz), which is a sound quality superior to all other streaming services and even to CDs. Conveniently, this is also the price plan that promises to put the most money back in the artists’ pockets (they’ll receive standard royalties on TIDAL Premium). The problem with this value add is that it’s not widely relatable. The general population wasn’t exactly sitting around before TIDAL launched saying, “Oh how I wish someone would just start a lossless streaming music service!” Audiophiles and sound enthusiasts who like to enjoy their music on calibrated equipment will appreciate the difference, but the average listener, who is most likely listening to music on their smartphones or computers with standard headphones, won’t be able to tell.

One leg that TIDAL could very well stand on is that of exclusive content. Co-owner Rihanna started things off by making her new single, the ironically titled “Bitch Better Have My Money,” available exclusively on TIDAL, as well as dropping a new music video for the song “American Oxygen” that can only be viewed on the platform. Beyoncé also released a new song and accompanying video, a reported anniversary present to JAY Z titled “Die With You,” exclusively through the service. If all the affiliated artists started pulling their content from other streaming services to give restricted rights to TIDAL, it would give them more creative licensing and put more money back into their pocket, but ultimately give the user less choice about where they consume their content. And how can you ensure exclusivity these days, in a time where there’s a technological workaround for everything? For example, ripped footage of “Die With You” surfaced on YouTube within hours of it being released.

The underlying issue here is that the music industry is experiencing growing pains yet again, and it’s impossible to point a finger at any single “technology company” or even medium as the perpetrator. The old model of huge artists working with huge labels to distribute music is dead; thanks to the Internet and independent productions and releases, artists are doing things according to a completely different temporal sequence, often growing their fame before their fortune, and doing both before being courted by a label at all. Music and content is being created, distributed and accessed in more ways than ever before, and a group of artists forming their own alliance and charging fans $20 a month for lossless audio isn’t going to change that. If anything, it’s going to create even more piracy problems. And while streaming music services are making it so that artists are getting paid less money from listens compared to sales of actual albums, consumers are spending more money than ever before on things like concerts, tours and music festivals.

So the big question remains: How does TIDAL expect to attract customers, if its two greatest value propositions right now are one that most people won’t see any value in and one that doesn’t mean much, since exclusive content is almost impossible to keep exclusive? As Wired poignantly pointed out, JAY Z did once claim that he could sell fire in hell, so it’s likely that over the next few months a more robust strategy for attracting customers will come into play, but for now it’s a game of watch and wait. JAY Z is both a businessman and a business, man. He knows a thing or two about growing a brand, creating demand and closing the deal, so he’s going to do whatever it takes to make people catch the wave. And if TIDAL fails to make a ripple, he’ll be left standing in hell with a whole bunch of extra fire on his hands. The good news for him is that he can afford it.