Tuesday, November 03, 2015

After Shaky Debut, Tidal Looks to Hopeful, Yet Competitive, Future

After Shaky Debut, Tidal Looks to Hopeful, Yet Competitive, Future:

Six months after Jay Z's Tidal service stormed the music-streaming market with a splashy press conference starring Beyoncé, Madonna, Kanye West and other pop megastars, the service has racked up 1 million users, released exclusives by Prince and Rihanna and developed an aggressive artist-discovery program that ties in with events like the Made In America festival. The company will celebrate its user achievement with an October 20th Barclays Center concert starring Beyoncé, Jay Z, Prince, Usher, Nicki Minaj and Lil Wayne, but can it build momentum to compete with Spotify and Apple Music?

Compared to Spotify's 75 million users — including 20 million who pay $10 monthly subscriptions — and Apple Music's announcement of 11 million users in August, Tidal's subscriber base seems thin. But Spotify had only 1 million paid subscribers in the U.S. within a year and a half of its 2011 launch here, and Apple has yet to announce adjusted numbers after the first wave of free three-month trials ended in late September. Tidal has a few built-in advantages: Although it's pricey at $20 per month for HiFi (a $10 monthly fee is also available), it's the only music-subscription service to heavily emphasize high-resolution audio files. And it has Jay Z, who paid $56 million for the service and has no intention of decelerating its growth.

"We have the unlimited resources of hiring people and scaling," Rune Lending, Tidal's chief technology officer, tells Rolling Stone. "We are very happy with where we are."

But many in the music business, where streaming is slowly taking over from CD and download sales as the main way of generating revenue, are skeptical of Tidal's prospects.

"It seems like they've just totally failed to gain traction. They have a tough road," says Ben Swanson, co-owner of Secretly Group, indie-label home of The War on Drugs, Major Lazer and others. "There's Spotify and there's Apple — it's great that there's at least two of them, but it's going to be really, really hard for anyone else to come around."

Many have criticized Tidal's initial press conference, which, while star-studded, was confusing and appeared to show artists having no idea what they were doing onstage. "None of the artists knew anything about the PR," Arcade Fire's Win Butler, a Tidal co-owner who participated, told an interviewer recently. "It was a poorly managed launch, but conceptually, the thing that we liked about Tidal was that it's HD streaming quality."

Given so many outspoken artists on its team, Tidal had focus issues early on: Jay Z gave interviews suggesting its mission was to compensate artists more heavily than other services; co-owner Jack White added that he wanted to see more "obscure albums" on the service. "There really isn't a clearly defined strategy," says a source at a major record label. "The hope is they can work it out."

Tidal does have some inherent business issues: It contains no Spotify-style freemium plan and its free trial period is only one month, compared to Apple Music's three. That makes it harder to draw in users who have never heard of the service. But on the flipside, it has steadily built up unique content. Prince streamed an entire concert via Tidal in May, despite withholding his music from streaming services, and added a new album later; Lil Wayne put out an exclusive album; and Rihanna, Beyonce, Madonna and others have dropped tracks and videos.

"Early on, it was a bit of a — I wouldn't say 'struggle,' but you had to educate people on what Tidal was doing," says Tim Riley, Tidal's senior vice president for artist and label relations. "But we've moved so quickly and built so much content that the word has spread. It's gotten a lot easier."

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Posted by Nelio Inacio at 5:08 AM

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