This past week TIDAL launched, a new streaming service that was purchased by Jay-Z for $56 million. It was quite the spectacle with probably the largest gathering of A-list music celebrities on stage for a product launch. None of the artists at launch really ever talked about the product itself or details about the service. There was a bit of talk about their strongest differentiator, the lossless high-definition CD quality of their sound. There was some mention of offline playback capability, which is a standard check-box item in all the ondemand services today. Other than that, there were no real product specifics, which is surprising and indicative of where we are in the evolution of the music industry. Now the celestial jukebox ondemand service has become a commodity. The amount of technical complexity, investment, and infrastructure required to build a mass-scale ondemand service is not trivial. Back when we started building these services 12-15 years ago, it was all about the features and for a short-time it was about the catalog size. Now, it’s about artist involvement as that’s how the services differentiate themselves.
TIDAL is not really an ondemand service as much as it is a statement and a movement about an artist owned platform. All of the artists have strong ideas and passions about what the future should look like for experiencing music, and TIDAL will be their platform to offer experiences beyond a catalogue of music and playlists. TIDAL could seep into their live concert and branded merch experiences in ways that we’re not thinking of yet. They may bring new meaning to a monthly fee for music beyond a basic track level service. I think TIDAL represents a strong potential for re-imagining what a financial relationship looks like with a fan and an artist, and it should not be underestimated. I’m cautiously optimistic and certainly want to be a believer. I would also count on their being more star-studded artists joining their team as more top of the tail players take sides. As with anything, however, it’s all about execution, and the technical side needs to be tight given the competition and excellence at Spotify and Apple.
Another key issue with TIDAL is that it will impact fans with artist exclusives and windowing much like film and TV streaming on Netflix, Hulu, Vessel, etc. That is an unfortunate byproduct of competition between services. Rights-holders think they’re better off maximizing short-term profit for long-term fan relationships. Windowing and exclusives only serve to frustrate fans. All fans want to do is engage their favorite artists conveniently wherever they’re already accessing their music. Requiring them to signup and buy into another service to hear an exclusive release will only lead to more piracy and resentment. Fans are the ones who ultimately lose out when not all music is available everywhere. Rights-holders lose out too, because they are not fulfilling all available demand for their music across all platforms. TIDAL’s equity holders may have illusions to the contrary, which would be a shame since then it becomes more about shareholder value and not about the music reaching the most people.
The silver lining in all this is that the top of the tail will implode with these exclusives across TIDAL, Apple, Spotify, etc. As the top artists start limiting their total potential fanbase across these services as they go exclusive with one, it opens the door for all the amazing artists who don’t play those games and make their music available everywhere. These middle-class artists will be able to pick up the attention of fans who would have otherwise been listening to more popular artists who are now only available on certain services. My main prediction is that in 3-4 years, most top artists will have extensive windowing strategies and exclusives motivated by brand deals and equity into these services. As they splinter into their silos, their fans will feel short-changed and spread their attention to other incredible artists who otherwise may not have had the opportunity to shine.