After much anticipation, tweets and even promos…Jay Z finally his plans for Tidal, a subscription streaming service he recently bought for $56 million today (March 30).
Squaring off with competitors like Spotify, Google and soon Apple, Tidal will toted as a home for high-fidelity audio and exclusive content…nothing too strange. But that’s not what makes it different.
What makes it unique is that a majority of the company will be owned by artists. The move may bring financial benefits for those involved, but it is also powerfully symbolic in a business where musicians have seldom had direct control over how their work is consumed.
“This is a platform that’s owned by artists,” Jay Z said in an interview last week as he prepared for the news conference announcing the service. “We are treating these people that really care about the music with the utmost respect.”
The plan was unveiled on Monday at a brief news conference in Manhattan, where Jay Z stood alongside more than a dozen musicians identified as Tidal’s owners. They included Rihanna, Kanye West, Madonna, Nicki Minaj, Alicia Keys and Beyoncé.
Jay Z’s plan is the latest entry in an escalating battle over streaming music, which has become the industry’s fastest-growing revenue source but has also drawn criticism for its economic model. Major record labels, as well as artists like Taylor Swift, have also openly challenged the so-called freemium model advocated by Spotify, which offers free access to music as a way to lure customers to paying subscriptions.
Tidal, which makes millions of songs and thousands of high-definition videos available in 31 countries, will have no free version. Instead, it will have two subscription tiers defined by audio quality: $10 a month for a compressed format (the standard on most digital outlets) and $20 for CD-quality streams.
“The challenge is to get everyone to respect music again, to recognize its value,” said Hov. “Water is free. Music is $6 but no one wants to pay for music. You should drink free water from the tap — it’s a beautiful thing. And if you want to hear the most beautiful song, then support the artist.”
It all sounds good, but Hov is entering the streaming arena as a boutique competitor against some of the most powerful companies in the business. Spotify has 60 million users around the world, 15 million of whom pay; Apple is expected to introduce a subscription streaming service this year. Last fall, Tidal’s parent company, the Swedish technology firm Aspiro, said it had 512,000 paying users.
In addition, the broader market for streaming music includes YouTube and the Internet radio giant Pandora.
Yet another hurdle is that while Tidal may have the support of individual artists, in many cases the distribution rights to their music are controlled by record companies.
While the artist deals were private, it’s been said that the participating artists were being granted shares in exchange for their good-faith efforts to supply exclusive content.
“Everyone knows that the pay system is unfair to artists,” he said. “Everywhere else, everyone gets compensated for their work. Music is everywhere — you consume it every day, everywhere you go. The content creator should be compensated. It’s only fair.”
Taylor Swift has been very vocal in pointing out the lack of fairness. She surprised many when she withdrew her music from Spotify, apparently because she did not want it offered free.
Still not everyone thinks this model will work.
“I think Jay Z is about to find out the limits of his celebrity,” said David Pakman, a venture capitalist and former digital music executive. “I am sure he will lure exclusive content onto the service but that will reach a limited audience.”
Jay Z said he was not concerned about the competition as long as he was able to put forth the service that he has envisioned.
“I just want to be an alternative,” Jay Z said. “They don’t have to lose for me to win.”
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