Entering a market cramped with competition, music mogul Jay-Z has launched Tidal, a new music streaming service owned by artists themselves in the United States.
The service was originally launched in Norway by Aspiro, but Jay-Z acquired it earlier this year. Together, they will compete with Spotify, YouTube, Google, Pandora and Apple for customers willing to pay for music.
This new service serves as a response to a common complaint among artists who think they receive low revenue returns from current streaming services. In February the PBS NewsHour’s Hari Sreenivasan explored the fallout between some artists and streaming services, such as Spotify, which offer both free and premium accounts.
During an interview with singer and songwriter Roseanne Cash, she revealed that for 600,000 streams of her songs over the course of 18 months, she received $104. In fact, the NewsHour previously reported that it takes 1,500 streams of an artist’s song on a streaming service to equal one album sale in revenue.
Other artists had sounded the alarm, culminating with Taylor Swift, the industry’s biggest money maker, pulling her entire catalog from Spotify last year.
So after buying Tidal for $56 million, Jay-Z is trying to change this business model. In a YouTube video promoting Tidal he said, “Right now they’re writing the story for us, we need to write the story for ourselves… this is about musicians making music, there is no end game.”
Other major artists joined Jay-Z in launching Tidal, including Rihanna, Kanye West, Madonna, Alicia Keys, the country singer Jason Aldean, who pulled his new album from Spotify, and Beyonce, Jay-Z’s wife.
Tidal, which operates similarly to Spotify on first glance, is not offering a free service. Instead, you can pay $9.99 for unlimited streaming (the same price as Spotify) or $19.99 for unlimited streaming at high-definition quality. Tidal will also offer exclusive tracks, videos and playlists from its artists. It can be used on your computer or downloaded onto an Android or iPhone. Artists will own Tidal, ensuring that all profits from the service return to the ones who made the music.
In an interview with Billboard, Jay-Z said music has been devalued.
“Music is a very valuable part of your life… People are not respecting the music, and are devaluing it. People really feel like music is free, but will pay $6 for water. You can drink water free out of the tap, and it’s good water. But they’re OK paying for it. It’s just the mindset right now,” he explained.
Offering a higher quality of music sets Tidal apart from most other streaming services, with Beats by Dr. Dre being the exception. It’s a move that Daniel Glass, founder of Glassnote Records and producer for Mumford & Sons among others, predicted to Hari Sreenivasan during an interview in December.
“I think the things we should be discussing are, the quality of the sound of the music,” Glass said. “YouTube is promising to make the sonic quality better, I think that will get high satisfaction rates. Just like cable television got you better reception, you were willing to pay for that. I am definitely willing to pay as a consumer, and I know my friends are for better quality of sound to equal what we had on the warmth of vinyl.”
Quality might attract audiophiles to pay out $19.99 a month to Tidal, but what about the average listener who has grown accustomed to music for free? Does Jay Z’s model really bring them as well? And is it better for artists?
At the end of last year Tidal had 500,000 subscriptions, a small fraction when compared to Spotify’s 60 million users, 15 million of whom paid $9.99 for premium Spotify accounts. Jonathan Prince, a spokesman for Spotify, told the New York Times that they think “it’s good for artists to be on Spotify because that’s where the music fans are.”
“It’s hard to see the upside for anybody involved in creating music to move away from a model that’s been so successful,” Ken Parks, COO of Spotify told Hari Sreenivasan during an interview in December. “We have an audience that’s over 50 million people. And these are the 50 million of the most rabid, engaged music fans in the world, and that’s where artists want to be by and large. They want the ability to connect instantly.”
Without a free service to entice subscribers, will Tidal be able to convince enough people to pay up? Spotify has said that 80 percent of their 15 million paying subscribers came from the company’s free service.
In a world where music can be found for free, Spotify thinks it’s important to convince people through a good, free experience that it’s worth paying for the better experience.
“For most of the history of recorded music there was a freemium model, that is free and paid as part of a whole,“ Ken Parks told Sreenivasan in December. “That was radio and record store, but this model has been broken for a long time with the launch of Napster and other free services. Our freemium model turns out to be a really efficient way to re engage all of those people. Twenty-five percent of the people who get introduced to our free service eventually start paying.”
Without a free service, some of streaming services’ arguments to lesser known artists about exposure and selling concert tickets will be limited to people already paying for music. Although Jay-Z says revenue from Tidal will make its way down the food chain from the mega artists who are launching it to the content creators.
“For someone like me, I can go on tour,” Jay-Z told Billboard. “But what about the people working on the record, the content creators and not just the artists? If they’re not being compensated properly, then I think we’ll lose some writers and producers and people like that who depend on fair trade.”
To have fair trade, Jay-Z needs customers. Tidal is available now for a 30-day free trial. Afterwards, listeners will be asked to pay.