Last night (March 29), Jay Z tweeted about the streaming service TIDAL he bought just months ago:
Soon after, tweets from Kanye, Rihanna, and Coldplay followed, urging people to change their profile pictures to the light blue you see above.
The tweets come prior to today’s 5 PM EST streaming announcement about TIDAL, but most people are still in the dark about what exactly TIDAL is, and more importantly, how it differs from established competition like Spotify, Beats, Rdio, and Pandora, to name a few.
Below are a couple bullet points about TIDAL, why it’s significant, and how it could sway users to join their service.
1. Two Tiers
Perhaps the most distinctive feature of TIDAL is the fact that there are two tiers – Premium, which is $9.99/month just like Spotify, and the HiFi option, which is $19.99/month. Both come with a free 30-day trial, but the latter offers “Lossless High Fidelity” audio quality. Whether that’ll matter to a large enough market remains to be seen. Considering a ton of people listen to their music on iPhone earbuds and laptop speakers, banking on audio quality, like Neil Young did with Pono, doesn’t seem like the best way to go.
You can watch this short video on TIDAL’s website to get a demonstration about the difference between standard MP3s and what they’re offering as an alternative.
One of the biggest criticisms of Spotify from the start has been it’s poor payouts to artists. Even in the case of Kendrick Lamar, his record-breaking streaming numbers for To Pimp A Butterfly only translated to 39,000 album sales. But there’s an inherent problem with Spotify. $10/month for millions of songs is the best deal we’ve ever heard of, so how can we expect artists to get hefty payouts if we’re paying so little?
In an interview with Tech Gen Mag, the CEO of TIDAL Andy Chen said since their service (or the HIFI tier, at least) is “double the price of regular market standard streaming services, payouts per user will also be double.” Again, that only makes sense for users paying $19.99, but if enough people care about more adequate payouts to artists and higher quality audio, it might work.
3. No Free Tier
Just like how artists have been pissed about low Spotify payouts, labels have been pissed about having to put their music up for users who aren’t paying a penny. In recent months, label executives have allegedly started having a change of heart about Spotify’s ad-supported free membership option. It seems like the conversion rate from free-to-paid users hasn’t been fast enough, and though Spotify argues that the “Freemium” model is their best bet for getting people hooked and then making them pay, labels are starting to grow impatient about when that change will occur on a massive scale.
Hence, no free tier on TIDAL and zero ads. Both Premium and HiFi options come with a 30 day trial, and if you’re not hooked after that, that’s the end of the road. It’s pretty clear they’re gunning for high-end users here. Whether that’s a good strategy is unclear. Early on, Beats marketed itself as a streaming service for people who might not be so familiar with “streaming” as a concept. TIDAL seems to be taking the opposite approach by targeting people who love streaming and high quality audio, and making them pay double.