Analysis of Streaming Platform: TIDAL
As of 2021, 83% of music streaming revenue resulted from music streaming platforms, to contrast, physical revenue was around 11% of music streaming revenue (source 2). Data shows that around 60% of people use streaming services to consume music, and that number is growing exponentially. Digital music is arguably the most popular way we consume audio. But what is a streaming platform? As a consumer, you may think of it as Apple Music or Spotify. However, within the industry, these services are called Digital Service Providers (DSP). SongTrust defined them as, “an entity that provides digital music services (whether streaming, downloads, or both), via computer or phone networks. DSPs tend to focus on driving almost all interactions online and across devices” (source 1).
One of the defining differences in music provided by DSPs versus music that is purchased (physically or digitally), is the music is considered a tethered download. This means that the audio file that contains music is only accessible through the DSP, allowing only conditional downloads. This means the DSP controls what, how often, and when you can listen to its music. At first glance, it may seem like all sites offer the same thing, but although most of it overlaps, there are differences in the audio provided. Some DSPs value quantity, while others value quality. When one thinks of quantity often Spotify is first to mind, Spotify has made podcasts, music, and audiobooks extremely accessible. However, there is only one streaming service that has historically valued high quality audio, and that is TIDAL. How can differences in streaming services be identified and what about TIDAL makes it different from the rest?
As we now know, not all DSPs are created equally. The undoubtedly most popular service, Spotify, has highlighted its mission to provide the most audio options and encourage consumers to stay on their platform for as long as possible. This can be evident when reviewing Spotify’s mission statement and vision. Whereas, TIDAL Service’s mission is to provide the highest-quality audio and create and maintain a system that values and benefits the artists. TIDALS official mission statement is listed as, “We empower artists to create and deliver their art exactly as they intended” (source 3). TIDALS Brand Values explore three main points:
- Superior Sound Quality, We deliver the art at its highest quality exactly as the fans want and as the artist intended.
- Deeper Connection with Fans, Through unique collaborations with the artist community, we create deeper connections for fans to experience music like never before.
- Commitment to the Art, We empower artists to create and deliver their art exactly as they intended.
In order to fully understand how TIDAL is practicing and maintaining its brand values it is necessary to dive deeper into what exactly TIDAL does. As a consumer of music, it is helpful to know what DSPs have historically valued and what they currently do to put their values into practice.
TIDAL was launched in 2014 by a Swedish public company, Aspiro (source 4). Today it is now majority owned by Block, Inc., an American payment processing company. Before Tidal was born, Aspiro functioned as a service that sold interactive games, ringtones, horoscopes, and systems to send fax messages from your phone to mobile networks. In 2010, Aspiro began to create its own music-streaming service, initially called WiMP. It was initially a success across Europe and was eventually renamed TIDAL. From the start, WiMP/TIDAL set itself apart from other audio services by focusing on delivering high-quality audio. In 2013, under the CEO Andy Chen, Aspiro began to feel more like a startup and less like a telecom company (source 5). Fast forward to 2015, TIDAL relaunched as an artist-backed alternative, after Jay-Z publicly bought majority of the company. The initial vision of Jay-Z was to create a service that benefited artists. Although the vision had a rocky start, often due to the popularity of its competitors, in 2021 Twitter co-founder and CEO of Square, Jack Dorsey bought the majority of TIDAL shares, making him the new owner. Throughout the seven years of TIDAL, there have been a handful of “controversies” and unfulfilled visions. However, its core purpose has always been to serve artists. So, what does Tidal currently offer to its subscribers and how does that serve artists?
TIDAL has identified and valued itself as the first streaming service for high-fidelity music. They provide to their subscribers over 90 million songs and 350,000 videos from artists all over the world. TIDAL has three subscription tiers: Free (with ads), HiFi (~$9.99/month), and HiFi Plus (~19.99/month). The Free subscription provides “good sound quality” (up to 160 kbps) along with access to 90 Million+ songs. HiFi subscription tier provides “HiFi Sound Quality” (up to 1411 kbps) along with access to all their music and videos, ad-free, and the ability to listen offline. And the last tier HiFi Plus provides Master Quality Authenticated (MQA), Dolby Atmos, Song 360 Reality Audio, and HiFi audio formats (up to 9216 kbps), access to all their music and videos ad-free, offline downloads, and direct artist payouts. They have promised to deliver 10% of the monthly HiFi Plus subscription directly to your most streamed artist. In addition, TIDAL HiFi Plus subscribers can see how their cumulative streams add up to artist revenue in their activity feed (source 6). When it comes to streaming revenue, TIDAL pays out $0.01284 per stream to artists. TIDAL pays the highest royalty rates out of all streaming platforms.
Since the introduction of Jay-Z in TIDAL, it has been TIDALS mission to benefit the artists on their platform. After its relaunch party on March 30, 2015, TIDAL established itself as an artist-backed alternative to Spotify or Pandora. Superstar musicians like Beyonce, Alicia Keys, Calvin Harris, Nicki Minaj, Rihanna, Usher, Kanye West, and so on publicly supported the effort and took to becoming stakeholders in TIDAL. However, there was a significant backlash to this publicity mainly focused on criticizing TIDAL for promising to revolutionize the music industry but seemingly only allowing rich artists get richer (source 5). One of Tidal's plans to benefit artists was to create and promote exclusives from popular musicians. One of the exclusive releases was Kanye West’s new album, The Life of Pablo. Although this could have been categorized as a success, The Life of Pablo was downloaded illegally, 500,000 downloads on its first day alone (source 5). If the downloads were legal, the album could have qualified as Gold. Alongside this unsuccessful situation, artists like Rihanna and Beyonce allowed for only streaming of their albums via TIDAL. Although these exclusives boosted subscribers, it was often momentary and didn’t keep subscribers long term.
TIDAL was often criticized for only benefiting already rich musicians. However, focus on the Indie artists of TIDAL rarely gets covered. Chicago Magazine interviewed an Indie artist about their expereince with TIDAL. Lili K recently released her debut LP, Ruby, on all streaming platforms and found that TIDAL was a great platform to reach listeners that really care about the quality of music. Lili K also highlighted that since the album has been available for streaming, so many people have discovered her just because they are on TIDAL. “They have me really prominently featured on the main page. On sites like Spotify and iTunes, there are so many artists, and it’s easy to get overlooked, especially when you’re an up-and-comer” (source 9). During the time Lili K’s debut album came out, TIDAL launched TIDAL Rising, consisting of short documentary series on rising artists. It was launched to help put a spotlight on rising artists that may get overlooked on streaming platforms. Lili K found that these resources helped her gain new listeners.
One of the biggest issues that TIDAL has faced since its inception is its competitors. Spotify and Apple Music have been able to capture the majority of the market share, creating stiff competition. Spotify’s music catalog consists of over 80 million tracks, including 4 million podcast titles (source 7). Apple Music offers access to more than 75 million songs, along with Spatial Audio with Dolby Atmos, and Lossless Audio (source 8). Spotify has been able to capitalize on its 433 million users with its use of its free subscription and low monthly prices. Whereas, Apple Music has been using the promise of exclusivity to lure consumers, and it has been successful with its estimated 88 million users. TIDAL hasn’t publicly stated how many subscribers they have since 2016 when it claimed to have 3 million users. TIDAL has under 2% market share according to MIDiA Q2 2021 data (source 10).
It is apparent at this point that Spotify has the majority of the market shares, at 31% according to MIDiA Q2 2021 data. The high percentage of Spotify users can also be evident in a small focus group of 15 participants. 15 participants aged between 20–25 years old were asked to take a brief survey about their music streaming usage. When asked what service they listen to music with, 100% of them responded they use Spotify, they also all indicated they have been using this service for 2+ years. When asked to use three words to describe why they prefer this platform some of the example responses stated:
“Quick, affordable, and has a wide selection”
“Popular, shareable, Spotify wrapped”
“Familiar, ease, customized”
“Good user interface”
“Convenience, variety, popularity”
Most participants identified that it was something they have histroically used. Some also included customizable aspects, such as Spotify-Wrapped and custom playlists. Participants also rated the service on a scale from 1 to 5 (1 being the worst, 5 being the best) and almost all users rated their perception of Spotify as a 4 or 5. When asked what is more important to them when accessing music with a streaming site, 53.3% declared that quantity is the most important, while 46.7% stated quality is the most important. The participants were also asked to identify the top 3 reasons they use their desired streaming service.
73.3% inidcated the history of using this service was one of the top reasons. Participants valued the history, variety in audio, and the accessibility of the interface. To conclude, the focus group further proves that Spotify is the main player. TIDAL's ability to influence users to their site can prove to be difficult. Users are less likely to transition once they have been using a streaming service for a long period of time.
So how will TIDAL find ways to gain in popularity? In 2020, Forbes highlighted multiple ideas for Tidal to embrace its mission to win the music streaming wars. Idea one was to leverage the social reach of the current artist owners. Forbes states TIDAL could implement an advertising campaign promoted by artists like Alicia Keys, Beyonce, Lil Wayne, T.I., etc. Idea two was listed to expand the idea of artist ownership. TIDAL could open up artist ownership shares to all members of the musical creative community through the creation of an artist affiliate program that pays the artists in stock. Idea three was to provide free lifetime accounts for every musician and songwriter on the platform. Idea four was to build an artist dashboard that includes followers/fans data. Lastly, idea five was to switch to user-centric payments (source 11). However, these ideas do not address the issue of enticing the masses to unsubscribe from their current streaming platform and move to TIDAL. The fairly new CEO Jack Dorsey publicly discussed plans for TIDAL as he moved into the role in 2021. “The spirit of what NFTs represent, the spirit of just looking critically at how artists are compensated,” the Twitter CEO says according to Coin Telegraph, “and of proving that, is something that we want to spend a lot of time and a lot of our focus on going forward.” Dorsey later expressed “What really dawned on me was how weak some of the toolsets are for artists, with analytics and data, to understand what they’re doing and help them inform their decisions” (source 12). It seems that TIDAL will continue to expand on benefiting its artists.
TIDAL’s war with music streaming platforms is proving to be an uphill battle. TIDAL will have to make big moves in order to capture a larger market share. However, as it is only 7 years old there is still hope it could eventually get to the level of Spotify or Apple Music. There is more hope for artists on the platform, in a world where streaming pays very little. As a consumer of music, it is always important to understand the frameworks of the streaming platforms you contribute to. If supporting your favorite artist and high-fidelity sound is something you value, then Tidal may be the service for you.
