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Jay-Z Debuts Tidal, a Spotify Competitor

Allow them to reintroduce themselves—now owned by Hov, Tidal is looking to go from low-key high-quality streaming music service to a major Spotify competitor. And, as dull as it is to have to drag out the phrase “Spotify competitor” again, there’s good reason this time—Tidal, in its current form, could represent the first major push by artists to own music distribution outright. Some artists, anyway.

Tidal itself comes from humble enough beginnings. Tidal hails from Spotify’s Scandinavian neighbor, the result of a collaboration between Aspiro AS and a chain of music stores in Norway called Platekompaniet. Their streaming service launched in Norway as WiMP in 2010 before slowly rolling out to other European countries as Tidal and finally coming across the Atlantic to Canada and the United States last October. Tidal remained under the radar, but became popular in some circles because it offered a more expensive uncompressed streaming service at $20 per month, as opposed to the compressed and lower-quality music files used by the likes of Spotify.

Things started getting interesting when Jay-Z made a bid to acquire Aspiro outright in January. The sale closed earlier this month, resulting in yesterday’s unusual press conference. Alicia Keys, Arcade Fire, Beyonce, Calvin Harris, Coldplay (Chris Martin, at least), Daft Punk, Jack White, Jason Aldean, J. Cole, Jay-Z, Kanye West, deadmau5, Madonna, Nicki Minaj, Rihanna and Usher all took the stage (well, some of them were on video call, close enough) to announce that they’re all co-owners of Tidal, as part of Jay-Z’s grand plan to turn Tidal into an artist-owned platform that cuts out the distribution middleman. Those ranks could swell, with the Financial Times reporting that Jay-Z is offering cash and equity stakes to other artists.

Watching the press conference as a consumer, you’d be forgiven for being a little confused as to why Alicia Keys delivered an ambiguous introduction before getting all those artists to sign some paper that was a declaration of something or other, which was followed by the introduction of a more expensive streaming service. There was a lot of grandstanding and talk about “preserving music’s importance in our lives” or whatever. That’s all hype, which, judging by the Twitter and YouTube reactions, not a whole lot of people bought into.

That disconnect between artist and consumer is going to be a problem for Tidal. That’s because consumers are rightly skeptical of the already extremely wealthy artists that are making themselves out to be the saviors of music. After all, it’s problematic seeing something pitched as a grassroots movement in which artists try to relate to regular folks, when you’re seeing footage shot in fancy ballrooms and swanky poolside resorts.

Besides the communication breakdown, there are some real problems that Tidal is going to need to solve. The first problem is one of value. I don’t doubt that there’s a difference in sound quality between uncompressed and compressed audio files. In fact, I’m willing to take it for granted that these artists, being that music is what they do, hear a night and day difference. I’m even willing to take it for granted that they get pretty frustrated hearing what their music sounds like in a compressed format. Thing is, most people listening to music on Spotify don’t have that kind of a trained ear, and aren’t going to be able to tell the difference. These artists need to convince people that there is $10 extra monthly worth of value in the difference, but short of making sure that everyone is a trained musician, I’m not sure how they can do that. That’s probably why they’re also rolling out a compressed-file streaming service that costs the same $10 monthly as Spotify Premium.

The other problem is that of royalties. When Taylor Swift yanked her music catalog from Spotify, her main gripe was Spotify’s free, ad-supported service, which paid artists very little in royalties. Tidal does not have a free service, so you won’t be surprised to hear that Taylor’s music is already on there. With no low-ball free service, Tidal seems like the perfect solution to the royalty problem—higher royalties, plus the middleman distributor gets cut out, leaving more money for the artists, right?

But, it’s not clear that Tidal will be any better than Spotify for most artists. According to The Verge, Tidal will pay out twice as much in royalties for songs streamed on their uncompressed service, but will still pay the standard rate for the compressed service. This is only going to benefit artists noticeably if the more expensive uncompressed service takes off, which is by no means a sure thing. Otherwise, it’ll be (bad) business as usual for any artists who aren’t co-owners of Tidal.

The ones who really stand to benefit from Tidal aren’t artists as a whole, but the artists who took the stage yesterday, and none of them are exactly hurting for cash. More power to that handful of ultra-successful stars for seizing control of their own work, but in the process, they’ve become an all too recognizable corporate middleman to every other artist who isn’t in the ownership circle. That’s not a revolution, it’s a business decision made by a dozen or so acts that are rich and powerful enough to make business decisions. Will that inner circle be offering equity stakes to any artist that wants one? Somehow, I doubt it, but I’d love to be wrong.

The final problem is a technical one—lossless streaming requires tons of bandwidth, because uncompressed files are significantly larger than the uncompressed files every other streaming services uses. Tidal and other uncompressed streaming services like Qobuz have always suffered from complaints about buffering and playback. A lot of people, particularly in the United States, probably don’t have a fast enough internet connection to support smooth, uninterrupted lossless audio streaming, something they might not be aware of until they’ve already signed up for Tidal’s $20 monthly service. Even if Tidal did grow quickly, it could very well buckle under its own weight and a barrage of complaints about buffering and load times. It’s not as serious of a problem as it is for, say, 4k video streaming, but it’s going to be a factor. Oh, and by the way, don’t stream Tidal over your data plan with your wireless carrier, or you’re going to be in for a really nasty surprise when the bill comes (or, best case, you’ll just hit your data cap in record time).

Despite having a host of obstacles to overcome, Spotify shouldn’t take Tidal lightly. Taylor Swift already took the nuclear option, and now that some of the biggest artists in the world have gone from reluctant partners to direct competitors, many more could quickly follow suit. Put simply, I think Spotify might lose a few subscriptions if Beyonce ever pulled up stakes.

The press conference was pretty misguided, and it understandably rubbed a lot of people the wrong way. But, as it was with Taylor Swift, there’s nothing wrong with any artist making business decisions about the music they created. Good for them. But, trying to pass this off as some kind of a power to the artists revolution is a bit cynical, because these artists are, to every musician not in Tidal’s ownership group, indistinguishable from the businesspeople that run Spotify. If it happens that Tidal’s uncompressed streaming service blows up and artists start seeing more revenue, great, but it’s going to be a hard road to get there.

That doesn’t mean all that much to you, the music listener. For you, Tidal is making the same kind of promises you’re used to hearing—curated playlists and exclusive events, video and music for members. Granted, there will be some interesting extras, like high-quality video, but the service itself doesn’t deviate much from what Spotify does. There will be no free service, only a $10 monthly tier for compressed audio and a $20 monthly tier for uncompressed audio. If you have a trained ear for music and can tell the difference between compressed and uncompressed audio, give Tidal a shot. Otherwise, whether or not you abandon Spotify probably depends on whether or not your favorite artists choose to abandon the service altogether. Doesn’t seem too consumer-friendly in that light.