The relaunch event for Tidal, a streaming music service purchased last month by Jay Z in a $56 million deal, was a who’s-who of popular music: Jay himself, Beyoncé, Rihanna, Daft Punk, Kanye West, Alicia Keys, and others took the stage in New York City to announce the artist-owned service.
Tidal is meant to “turn the tide,” they explained, restoring some of music’s inherent value that’s been chipped away by free streaming services such as Spotify.
Will Tidal catch on? It’s too early to say whether music lovers will cotton to the idea of a streaming service with no free tier, but early indications are positive. Shares of Aspiro, the parent company that owns Tidal, shot up 938 percent after the relaunch announcement. According to Reuters, the spike indicates that investors are optimistic about Tidal’s long-term prospects – so optimistic, in fact, that Nasdaq OMX Stockholm, where Aspiro shares are traded, had to halt trading on Aspiro.
If it catches on, Tidal will be a boon to the recording industry. The company said it will pay double the standard royalties for streaming songs, putting more money in the pockets of record companies and artists themselves. The company is clearly positioning itself as an alternative to Spotify, which allows users to stream most music for free (with ads interspersed periodically), but has been accused of paying tiny amounts of money to artists, even when their songs are streamed thousands of times.
The cheapest Tidal tier is a penny under $10 per month for desktop streaming. Audiophile customers can pay $19.99 per month for high-quality audio, and customers of either tier can pay an additional $3 per month to be able to access the service from their smart phones. The base price of $9.99 per month is identical to Spotify’s subscription price. Tidal currently has about 17,000 paying subscribers. Spotify has 15 million paying subscribers, and another 45 million who use the free service.
Spotify argues that offering a free, ad-supported service helps attract users to the platform, and that the bigger the customer base, the more people will begin paying for subscriptions. But artists have argued for years that Spotify and other streaming services have tended to undervalue music itself. Taylor Swift famously pulled her entire catalog from Spotify last December, saying that despite the enormous popularity of her music, she wasn’t being compensated fairly.
Tidal takes the opposite approach: customers must pay to use the service, which all but guarantees that the artists who choose to make their music available will be paid more each time their songs are streamed. Jay Z said in a Billboard interview that record companies were suspicious of Tidal, but executives will probably come to prefer Tidal to Spotify. The big question is whether a streaming music service without a free tier will catch on with customers. If it does, the “artist-owned” Tidal could cause us all to reconsider how much music is worth to us.