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TidalIn October of 2014, Tidal HiFi launched in the U.S. offering CD quality audio (FLAC files at 1411 kbps) for $19.99 per month. Last week the musician Shawn “Jay Z” Carter bought Tidal’s parent company Aspiro for $56 million.

Now, Tidal is offering two tiers. The Premium subscription costs $9.99/month and offers music at 320 kbps (same as Beats Music and Spotify). The HiFi subscription costs $19.99/month offering lossless quality audio. A free advertising supported tier is not available currently.

Jay Z gave 16 artists a reported 3% equity stake in Tidal. He intends for the rebirth of Tidal to be created by artists, for the fans, and to deliver a better value for all artists. The artist/owners are: Alicia Keys, Arcade Fire, Beyonce, Calvin Harris, Chris Martin of Cold Play, Daft Punk, Jack White, Jason Aldean, J. Cole, Jay Z, Kanye West, Deadmau5, Madonna, Nicki Minaj, Rihanna, Usher.

Having all this star power seems to have backfired as fans are vowing to go back to pirating instead of making successful artist even wealthier. The YouTube video of the press conference has more thumb downs than thumb ups currently. Pay outs to artists will not increase because Jay Z is now a streaming music company owner.

Another troubling area is exclusive deals with artists which Tidal is pursuing. Jimmy Iovine at Apple is reportedly trying to do the same thing with Beats Music. A song released exclusively on one service for a time is not great for fans. The movie industry calls it windowing. This strategy had its place in a different era, but not in todays social digital entertainment landscape. The obvious response from users will be, if I cannot get this song from the service I subscribe to, I’ll simply search for it and listen elsewhere — then no money goes back to the artist…

Will artist exclusive deals be the differentiator that will grow music streaming subscribers? No. Consider music fans that want to share music and playlists with friends — listening on different services because of exclusives is too much friction. Users are smart and will most likely find the music elsewhere, probably for free.

During a Q&A at New York University Jay Z and Tidal executive Vania Schlogel answered a curious question: “is it possible for independent artists to get equity in the company? How is that determined?
Schlogel replied: “Absolutely. We’ve set up a stock appreciation rights program already — it’s nascent, but it’s in place. And as we go along, we’re working with the artist founders and figuring out how exactly to grow and evolve it going forward, and figuring out how we will set up this program and send out that messaging, especially to independent artists.”

Bringing Bob Lefsetz’s thoughts to the discussion always adds color. Lefsetz believes Tidal will never gain traction. He wrote:
“Apple should have a free tier. Since not everybody subscribes to a streaming service, there’s a chance Spotify could be dethroned. But not by an entity that’s a walled garden. Meanwhile, by separating exclusives we’re just forcing the public to steal. That’s a solution? Spotify has reduced piracy and now we’re gonna bring it back?

MTV was hampered by a small footprint. They gathered artists to launch the “I Want My MTV” campaign imploring fans to lobby their cable systems to add the service. What happened? SUCCESS! Where is this same campaign today? Everybody’s so worried about giving the money to someone else that they’re stuck in the past with rearguard efforts.”

The only thing for certain is more people are aware of streaming music services since Jay Z’s Tidal purchase. Still to come, Apple/Beats Music release and YouTube Music Key wide release.

The Atlantic: The Golden Age Of Online Music Is Over (And Another Is Beginning)
Lefsetz Letter: More Tidal

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