With the untimely death of Prince and Beyonce’s expected new album release, Tidal continues to convert new music lovers to its music-streaming platform. In mid 2015, Prince moved his entire catalog to Tidal. As the spouse of the Tidal owner, Jay-Z, Beyonce exclusively released her new album, Lemonade, on the premier Black music-streaming platform.
Tidal’s strategy for increasing market share consists of taking users from Spotify, Apple Music, and other music-streaming companies by providing exclusive access to music. In the last 4 months, Rihanna, Kanye West, and Beyonce have all released exclusive albums via Tidal; each of these artists also has an undisclosed stake in the company – which shows that Tidal’s strategy is returning music ownership to artists. Out of the 3 main music-streaming companies, Tidal pays the highest profits to artists at 75%; Spotify pays 70% and Apple pays ~72%.
Spotify’s Head of Communications threw shade at Tidal this week, claiming that in the long-term, exclusives are bad for both artists and fans. While this may be true in the long-term, I think Jay-Z exclusives are a short-term play to kill competitors (of course, Spotify knows this – they’re just mad). Due to Tidal being privately owned, there isn’t consistent, credible information about the Tidal user base and how each exclusive has affected Tidal’s market share. As of March 2016, Tidal had 3 million paid subscribers, while Spotify had 30 million and Apple Music had 11 million.
Tidal is as grassroots as a high-profile celebrity can get. Jay-Z is creating a monopoly, working with and offering company ownership to the highest-profile (aka the biggest money makers) artists. Spotify and Apple Music will likely make significant changes to their existing business models and strategies over the next year to complete with Tidal. Google and Amazon have also entered the market so an M&A deal could go down, merging 2 companies. There is always the potential for the video-streaming companies to enter the market, or buy one of the music-streaming companies as well.
Currently, the music-streaming industry has not proven to be profitable for the companies. The beauty of Tidal is that it’s artist-owned so company profitability does not matter, as long as the artists are gaining higher profit margins than they would at another music-streaming company. I’m sure Jay-Z’s pockets are getting fatter than the rest of the artists, but Tidal was his brilliant idea.
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