By Rahul Gupta
Put me anywhere on Gods Green earth, Ill triple my worth Jay-Z
Jay-Z acquired the Norwegian streaming service Tidal on 15th March 2015 for 56 million USD. Further, on the 23rd of January, Sprint (a telecom operator) bought 33% of Tidal for a reported 200 million USD. Tidal is now valued at over 600 million USD.
A star-studded cast of owners
Tidal co-owners included Taylor Swift, Kanye West, Jack White, Daft Punk, Jay-Z himself and many others. Pitchfork magazine correctly labeled the owners as the top 1% of music globally.
Originally, Tidal was launched by Aspiro, a Norwegian company. Subsequently, a company owned by Shawn Jay-Z Carter acquired Tidal. When Tidal was re-launched 2 weeks later, it was hailed as the first artist-owned music streaming service. Tidal co-owners included Taylor Swift, Kanye West, Jack White, Daft Punk, Jay-Z himself and many others. Pitchfork magazine correctly labeled the owners as the top 1% of music globally. Tidal aimed to restore the value of music by handing over control of the music back to the artist.
What is unique about Tidal?
Apart from a star-studded cast of owners, Tidal distinguishes itself from other music streamers like Apple Music or Spotify in three unique ways:
First, Tidal offers a premium subscription, which provides subscribers with high fidelity lossless audio quality. The increment in quality, however, as most point out, is only discernable to audiophiles with high-quality listening equipment.
Tidal Wave: Usher, Rihanna, Nicki Minaj, Madonna, Deadma5, Kanye West and J. Cole were among the artists who joined Jay Z for the launch of his new artist-owned streaming service | Photo Courtesy: ForbesSecond, Tidal is more expensive than its competitors. This is done with a view of boosting royalties to artists who commonly claim that they do not get a fair share of enrichment from their creative process.
Finally, as a consequence of number two, Tidal enjoys substantial early and exclusive content. Both Kanye West and Beyonce launched their respective albums via Tidal. Moreover, the platform hosts artist-curated playlists and exclusive music videos.
Sprinting across the Tides
Sprints acquisition comes at a good time for Tidal. Tidal had been searching for a partner and at various points, they were in talks with Apple and Samsung.
In the beginning of 2016, Tidal was thought to have been losing money in competing with other bigger streamers. Also, the company was accused of not paying its dues to thousand small labels in Norway for months at a time. Finally, it wasnt able to challenge the supremacy of other streaming services. Given the above, it seems understandable that Jay-Z was looking for ways to recoup his investment.
[su_pullquote align=”right”]What is unique about Sprints purchase is that Jay-Z and Tidal still remain in control of the company though one board seat is now Sprints.[/su_pullquote]
What is unique about Sprints purchase is that Jay-Z and Tidal still remain in control of the company though one board seat is now Sprints. Sprints 45 million subscriber base may appear as a lucrative opportunity for Tidal and the companies may find a way to bundle their services together. The announcement by Sprint of a 75 million USD budget for Tidal exclusively is noteworthy.
A lucrative industry
[su_pullquote]Streaming services, including video streaming like Netflix and Amazon Prime, have recognized the value of native content. By focusing on exclusives and original content, each streaming platform has tried to out-do the other.[/su_pullquote]
Streaming services, including video streaming like Netflix and Amazon Prime, have recognized the value of native content. By focusing on exclusives and original content, each streaming platform has tried to out-do the other. This market is unique and it is likely that a consumer subscribes to more than one streaming platform at a time owing to its original content. Moreover, given Sprints size, it may be able to reduce subscription costs in the medium run. Sprint has correctly identified this sector as potentially lucrative and this investment has the potential to produce good outcomes for the company.Moving towards higher Internet speeds and a culture that prefers legitimate to pirated content, Sprints entry into music streaming seems natural. As the viability of the streaming model increases, we are certain to see companies with bigger pockets join the fray.