Tidal: do we need another music streaming service?

Impressive lineup of artists at Tidal's launch event yesterday.  Source: PC Mag

Impressive lineup of artists at Tidal’s launch event.
Source: PC Mag

Jay-Z announced a new venture yesterday: Tidal, a music streaming service. Aside from the impressive list of prominent musicians that are behind this venture, it’s not clear how Tidal can stand out in the already crowded field of music streaming.

Let’s start with the price. Comparing prices with some of the other music streaming services shows that at $19.99 per month in the US for the high-quality option,Tidal is more expensive. That said, the “low quality” $9.99 cost is identical to Spotify, Rdio, Google Music, and is the expected cost of Apple’s upcoming streaming music service, Beats Music. Amazon’s service is included in its Prime package while Pandora’s premium service costs only $4.99 but it’s a different product as only offers radio stations and not the ability to call up a specific song.

To start a music streaming service this late in the game, at the identical price point of its competitors, Tidal will need a few product advantages beyond a star-studded launch. Can these differentiators help?

  • Number of songs: Tidal, 25 million, Google Music and Spotify, 30 million, Rdio, 32 million. Tidal is at a disadvantage on pure numbers but this will probably be a short-term problem.
  • Exclusive songs: at launch, Tidal “unveiled a bevy of exclusive releases for its initial subscribers. Among them, The White Stripes’ first-ever television appearance, Daft Punk’s 2006 film Electroma, playlists curated by Arcade Fire, Jay Z, Beyoncé, and Coldplay, a preview of Todd Rundgren’s new collaboration with Lindstrøm and Emil Nikolaisen, and more” according to Consequence of Sound. While this exclusivity is for a limited period only, if Tidal is consistently first with exclusive content, this could be an important differentiator given that everything else, including cost, is the same as other services. This, of course, depends on how soon Tidal can catch up to its competitors in the number of songs offered.
  • Free tier: Spotify has a free, ad-based listening option and claims that it’s a great entry point to paying subscriptions. Daniel Ek, CEO of Spotify, claims that “as long as Spotify accomplishes its main task—getting people to stream more music—free users will continue to upgrade to paid subscriptions.” Tidal has a free trial period only.
  • Offline access: Tidal is not unique in this. Spotify has it, among others.
  • High quality audio: only Tidal claims to have it. How much will this be a differentiating feature? It’s hard to tell. Recent stats show that over 50% of Spotify listeners listen on a mobile device. According to TechCrunch: “42 percent of listening comes from smartphones and 10 percent comes from tablets. The remainder comes from the desktop client (45 percent) and the web player (3 percent).” So users are either listening on their devices mediocre (at best) built-in speakers or a cheap set of headphones or, by transmitting it over a Bluetooth connection (sometimes with a loss of quality due to compression and depending on the Bluetooth version supported) to a cheap desktop speaker. Sure, there are audiophiles who have high-end equipment but, and this is a big but, these listeners are traditionally the ones who have preferred downloading music as opposed to streaming. Will they switch to high-quality streaming?
  • Family or shared subscriptions: Rdio and Spotify offer them, but Tidal doesn’t seem to have that option yet.
  • Taylor Swift’s 1989: no one. But that’s another post altogether. Tidal does have her previous four albums, but that’s not exclusive. Even though Spotify doesn’t have them, other streaming services do.
  • Artist-owned: Tidal is “the only artist owned platform.” Do listeners care?

So, in the end, what does Tidal offer? At the $9.99 per month tier, a price identical to competitors, fewer songs but exclusive content. Depending on a customer’s musical taste, this could motivate a switch. At the $19.99 per month, high-end audio tier, maybe nothing at all.

A year ago, Re/code’s excellent analysis of the streaming music business claimed that “data tells us that consumers are willing to spend somewhere around $45–$65 per year on music,” not the $120 per year that all the services are charging. This could be the reason there are still so many subscribers to free services (on Spotify, free listeners outnumber the paying subscribers 3:1)  This also leaves the door open for new services offering different, cheaper tiers. Maybe limited by genre or release date. Regardless, product innovation in the music industry is far from over and will be, as always, interesting to follow.

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One thought on “Tidal: do we need another music streaming service?

  1. Pingback: Music & streaming: new numbers, new trends, new products | What it all boils down to

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