Tidal looks to crash the streaming world4/8/2015
Premium technology is the specter all developers long for, but few have achieved. Luxury is easily attainable. Six-figure cars and stereo systems pack in pricey, high-end technology but require stringent upkeep. Premium means a steep price tag but not the excessive maintenance necessary for ownership. Apple builds premium consumer devices, Tesla builds premium cars, and now Tidal wants to be the premium streaming audio service. It’s too bad for Tidal that too few people are willing to pay the price for premium audio.
In the late 1990s, music reached its peak value. New release CDs were usually $15, and sometimes $20 or more. Since the turn of the century with the peer-to-peer downloading revolution began by Napster and the digital music sales iTunes ushered in, the bottom has completely fallen out of the music industry. Today, albums have virtually disappeared, and individual songs are either streamed for free or sold for less than $1.
Late last year, Taylor Swift famously pulled all of her music from Spotify, citing the royalties generated by the popular streaming service were so paltry it equates to piracy of her work. In 2013, David Lowery, frontman for the band Cracker, posted online that his group’s 1990s hit “Low” had been streamed just over one million times on Spotify and generated only $42.25. Artists are fed up with the streaming service pittance and the current state of the music industry. So out of that rage comes “Tidal,” an artist-backed service where art will be fairly valued and rewarded.
Owned by Jay-Z and supported by Daft Punk, Kanye West, Madonna and many more, Tidal is the artist-first streaming option. Whereas Spotify, Pandora, Rdio and others offer advertising-driven free options for music fans to stream music, Tidal is a paywall-only service. Seeing itself as the Netflix of audio, Tidal has tiered levels of delivery that gives music lovers some premium options. To access Tidal’s gated-garden of artistic material including music, videos, interviews and forthcoming exclusives, the entry fee is $9.99 a month for radio quality streaming and $19.99 per month for the high-definition access. Since Tidal gives artists the first cut of the proceeds, and all users need to pay to play, artist royalties could end up being significantly higher than any other service.
The problem is that music streaming is nearly a zero-sum game. Pandora and Spotify have struggled for years to be profitable. While artists are getting paid pennies, the billions in revenue generated from streaming have gone to record labels, managers and distributors. Artists are generally the last in line to get paid. Traditionally artists have made their millions touring and selling merchandise, and unless they sell a million or more albums, music royalties have historically been a joke. Think the bus fare royalties from streaming is bad? Radio pays nothing, and it has been that way forever.
Will Tidal reverse the decade-long industry collapse? Extremely unlikely. Only 25 percent of Spotify’s 60 million users pay $9.99 a month for premium access, and Tidal is entering the fray just as tech giants Apple and Google are unveiling streaming options of their own.
Sadly, most consumers only find value in tangible goods. An iPad, which has the necessity of a basement pool table, has only increased in price since its debut in 2010. Whereas music, a product you can’t hold and is ridiculously abundant, seems like something perfectly OK to pilfer. So it doesn’t matter how many Jay-Zs, Jack Whites, Coldplays, Beyonces and Rihannas link arms and cry over royalties, their fans are still going to pick the cheapest method to find their tunes. CV
Patrick Boberg is a central Iowa creative media specialist. Follow him on Twitter @PatBoBomb.