Examples of new ventures which seem to have all the ingredients to succeed, but ultimately fail to live up to expectations aren’t difficult to find. Given the hype surrounding its launch, its big name celebrity backers, and considering the industry it’s trying to disrupt, Tidal is looking more likely to add its name to that dubious list.
The music streaming service, which Alicia Keys stated would “change the course of music history” has been met with criticism from competitors and artists alike. To be fair, there are a number of bones to pick with the platform, ranging from its price tag (up to $20 per month, with no free option), to the way it’s been promoted. Has the negative response to Tidal been proportional to its actual market influence though, and does public perception ultimately wind up playing a central role in whether or not a business of this nature proves to be a hit?
Music Economics 101
A quick look at the music streaming market would show that freemium has become the norm. Consumers have more or less come to terms with the fact that access to large databases of relatively high quality music will entail having to deal with at least some commercial breaks. Furthermore, piracy seems to be just as popular as ever, with the RIAA estimating that between 2004 and 2009 over 30 billion songs were downloaded illegally. In fact, it’s estimated that only around 37% of music consumption is actually paid.
Tidal is trying to stake a place in the market by offering higher quality sound as compensation for its customers having to cough up cash in return. This is one of the main indications that the company’ executives might have miscalculated the value of what the platform is offering, along with the actual scope of its appeal.
Services of this nature might be appealing for a music producer who is genuinely in need of high quality audio, or other restricted niche markets within the industry, but to an every day consumer who can already get relatively good quality music for free from an endless number of legal (and illegal) streaming/downloading sites? Not so much.
At the end of the day, questions must be raised about whether the company genuinely believed this selling point would drive growth on a large scale. If not, it seems they had another card to play as well, one of supposedly bringing music back to the artists.
“A Platform Owned By The Artists”
Anyone who knows aspiring musicians is well aware of the uphill battle they face both for recognition, along with income. Unless you have significant commercial appeal, and diverse revenue streams, losing money to pirated songs can truly be a major issue. This is one of the reasons why we shouldn’t be so quick to write off what Tidal is trying to achieve. What should be discussed though is how the firm went about achieving it.
As a general rule, having multimillionaire pop artists preach about why its important for people to buy their music isn’t going to win much sympathy from the masses (see Metallica and Napster). This is where perception comes into play.
Imagine for a second that a startup similar to Tidal was launched by a cooperative of independent recording artists looking for a more profitable alternative to platforms like Spotify, which is seen in some circles as exploitative of musicians, given their low reward-per-listen. Furthermore, imagine that in the place of Jay-Z and the rest, one of this cooperative’s members took the stage at the launch event to share their thoughts on the important of the public backing an artist owned alternative to the corporate hegemony of the industry. It’s fair to assume that such an approach would garner more far-reaching sympathy from audiences around the world.
This is ultimately the root of the problem. Tidal is corporate. It’s the creation of ultra-rich recording artists, and makes no quarrels about not putting the consumer first in this regard.
Moreover, it’s a company that seems to still not know where to position itself. If its aim is to offer premium quality, then why market it to the everyday listeners, most of whom have no need for such a service? If it wants to “fight the establishment”, then how can it justify being headed by establishment artists?
British recording artist Marina and The Diamonds hit the nail on the head in her assessment of Tidal, and its promoters. “Sure, they’re really respected musicians, but they’re all globally renowned business men and business women. They all have a lot of money. For me, it would make more sense if the message was about supporting the artist, which I think is within their message, but they should actually include artists like include Beck, The Distillers or The Maccabees—include bands who’ve made great work, but maybe aren’t on their level in terms of commercialism”.
A Sweet Farewell
The bittersweet lesson to be learned from Tidal’s imminent failure is that there is still room for innovation in the music industry.
Having hit on two major consumer needs, high quality music for select audiences, along with a platform actually run by musicians, and which offers a fairer profit-sharing arrangement, the company might have opened the door for offshoot’s catering to both markets in the future.
Ultimately though, brand perception is everything, especially for a startup. Tidal might host a number of independent musicians, but for the reasons mentioned above, the company has turned off a significant portion of its target market (whether it has actually assessed what its target market is can be debated).
However well a product or service might be promoted, if the central role isn’t to put the customer first, the business is bound to fail. Tidal seems poised to serve as the latest example of this rule.