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Adam Smith

Managing Director

Can Tidal justify its high price point?

So much was being said about Tidal yesterday. The PR team was in full effect and the news of its launch was in most peoples faces before they’d even made it to work.

With #TIDALforALL trending, it’s interesting to see the backlash from the public.

As a quick introduction, Tidal is a high quality music service, backed by Jay-Z and a handful of other artists, who are fighting back against technology businesses (i.e. Spotify and Apple) and putting the control back in the hands of the artists. At $20 a month, it’s twice the price of Spotify, but it does have supposedly higher quality streams, using FLAC over MP3 to give CD quality audio. Is that enough for a 100% price increase to the competition, what other features will it have to make that worth my while?

It’s a unique case given the previous and exciting relationship with the ‘company’ in the sense that it’s ‘owned’ by the musicians we’re all familiar with. Are people fed up with distant corporations owning the music industry over the actual artists, and do they support that enough to make Tidal a success? That’s the premise of Tidal, and it makes a fair point.

Alicia Keys states that the mission is to go "beyond commerce and technology ... to preserve music's importance in our lives....We want to create a better service and better experience for fans and for artists."

Aside from that angle, it’s also possible to look at this more objectively as if it was any other tech service launch. Regardless of the story behind it - does it work as a piece of commercial tech? Is it a product that can gain traction against the likes of music streaming giant, Spotify?

Celebrity Musical Crusade

So there’s two issues at play here, we have a collective of music stars positioning that Tidal is about the art and love of music, and hoping that the public are empathetic enough to get involved with this artistic plight. They’re also hoping that the public won’t see this as just another way for Jay-Z to add to his half a billion dollar empire, and finally that this is solely a service for real music lovers, by music lovers.

For me, this is a misfire. Something feels a little off and in some ways insulting - I think the public deserve a little more credit. People know that the music industry isn’t black and white. They are already seeing through this thin veil and of course, being vocally cynical on social media. As a service, Tidal exists to make money for artists where Spotify failed them - and there’s absolutely nothing wrong with with creating a successful revenue model... Just don’t pretend that the sole motive for your service is to help a good cause.

Feature Value Analysis

The second issue, is more akin to one of a traditional start up. Most of the news today has been based on the artists being out of touch with their fans. However, this second issue is more close to our hearts - it’s not following the basic rules of creating a successful online product through a misalignment of value, market position and user benefit. Have they made a product that people are actually prepared to spend money on? In my mind, no. They’ve over estimated how much people care about CD (or vinyl) quality music. High quality streaming on any other service is perfect for 99.9% of people and will sound exactly the same on most audio setups. For most consumers it’ll be like paying for a 4k video streaming service to then watch on a normal HD TV.

This may have been a success a few years back - but the interesting thing is I don’t think that has anything to do with Spotify’s traction or maturity of the streaming market, it’s to do with the improved education of consumers. They’re not stupid. They know that most businesses exist for purely economical gain and lose trust when it’s pitched as something else. They also, having been consumers of tech apps and services for a longer period, understand feature sets, benefits and can quickly determine their own perceived value to cost calculations on new products. This is why there’s a backlash - the market is now educated. They understand technology and their needs enough to make a rational decision. It’s a more informed choice to pay for something. So when the price point is wrong, the message is evangelical and the features are far from revolutionary - it’s going to be difficult get users on board.

This may also give some background as to why the alternative hashtag #TIDALFORNOOONE is also trending.

Streaming Eventuality

I personally don’t think it will succeed at it’s current price point and feature set. Which is a shame, because I do generally buy into the concept - we do need to bring the human element back into the distribution of music. I would also be prepared to pay a premium for better content - no one likes sifting through a million karaoke and supermarket versions of a song on Spotify - but this simply hasn’t been made accessible.

Their best route from here, if they generally want to be seen as the premium product, is to make the content super accessible - add Chromecast support to the mobile versions, release smart TV Apps, produce exclusive content (which is planned) and prove that it’s for music lovers, and not just an attempt to steal market share from Spotify. This will be achieved by genuinely following through on the promise of accessible and exclusive content. I for one would pay $20 a month if the content was good enough - it’ll be a great win for musicians if we could find a medium where people value music again.

Anyway, for those wanting to check it out, they do have a 30 day free trial period, courtesy of Jay-Z and friends.