Can Jay Z’s Streaming Service Tidal Rival Spotify?

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Instead of paying for individual songs or albums and downloading them to their computer, consumers and music fans are now opting to pay a relatively low monthly subscription fee to stream tracks through their computer, tablet or smartphone. However, streaming services offer only small royalty payments to artists, which has prompted singers and musicians to ask for their music to be removed from services such as Spotify.

Jay Z’s music streaming service Tidal is aiming to create a ‘platform owned by artists’.  Tidal was re-branded and re-launched by Jay Z at the end of March, but was originally launched in 2010 by Norwegian company Aspiro under the name WiMP. Therefore, Tidal has already had a head start in acquiring customers and currently has around 500,000 users of their low-cost account and 10,000 users of the premium account. Jay Z purchased Aspiro in January for $56m and now has a collection of music friend investors such as Kanye West, Beyonce, Rhianna and Jack White.

Tidal currently has a good back catalogue and offers higher sound quality than Spotify. There are no free ad supported options for Tidal- a standard audio account costs $9.99 and a premium account costs $19.99 per month in exchange for higher quality audio and unlimited streaming. Spotify currently has 15 million users who pay $9.99 a month for the service, and while the sound may not be of the same quality there will be a large portion of those users who are more than happy with the service they receive. In addition the higher sound quality (1411 kbps vs Spotify’s 320 kbps) is only really noticeable if you have speakers or headphones that were made to replicate such quality.
While record companies generally get more royalties from streaming services than artists do, the artists who gathered to at Tidal’s launch- Jay Z, Nicki Minaj, Usher and other high profile stars, are hardly struggling for cash and so are maybe not the best advert for Tidal. It will be interesting to see how Tidal grows, but it is unlikely to overtake Spotify’s 60 million current free users and 15 million paid users, and it will be them that ensure record labels will continue to allow their artists’ music to be broadcast through Spotify’s service. For many Spotify users, opting to switch to a service that you’re happy with to make eye-wateringly wealthy artists even wealthier is unlikely to a big draw for many.

As if Spotify wasn’t big enough competition for Tidal, they also have a new rival that will launch wordwide soon. Apple bought Beats Music for $3bn last year and already have a music streaming service in the US but they plan to this roll out to other countries this summer. Apple’s streaming service may be included as an app on iOS updates, which would be a real cause for concern for both Tidal and Spotify as iPhones currently make up a fifth of smartphone sales worldwide.
Both Tidal and Beats have enough connections behind them to be able to host exclusives in the future such as being the only service to allow streaming of a new high profile artist or album, and this is an area where Spotify may struggle. This practice is called ‘windowing’ and Jay Z is reportedly trying to secure exclusive streaming of new albums on Tidal for seven days after their release. However Spotify’s age has landed it a deal to launch on Playstation 3 and 4, allowing users to listen to music through their console directly, a practise which adds convenience for users and does not tie them down to single artists.

Tidal’s relaunch has been met with a number of scathing articles and newspaper reports, many criticising Tidal’s re-launch as conceited and drawing attention to the fact that the service will be no better for smaller and relatively unknown artists than any other streaming site.

It is too early to predict the future for Tidal, but the cost of the service and reluctance from users of other services will definitely play a part. For now, it seems Spotify does not need to be looking over its shoulder just yet.

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