It’s all about the money
The subscription-based music streaming war is heating up. Yesterday US rapper Jay Z, backed by an all-star cast of music artists, announced the purchase of streaming service Tidal.
The service will become the latest contender in the streaming space, which is currently dominated by Swedish company Spotify.
Meanwhile, YouTube and Apple are also preparing subscription-based offerings for release.
Tidal is specifically designed to make more money for artists – a major criticism levelled at Spotify.
Jay Z has wooed top acts including Kanye West, Madonna, Alicia Keys, Beyonce, Rihanna, Jack White and Coldplay’s Chris Martin, who will all become equity partners in the enterprise, with stock options and cash in exchange for promoting and marketing the service.
The service will cost users £19.99 a month – twice the price of a Spotify subscription – offering what it claims is a “lossless” quality audio stream.
Spotify also offers a free ad-based tier of subscription, which is very unpopular among artists and record labels. Tidal will offer no free services.
Speaking to US music magazine Billboard, Jay Z said: “We didn’t like the direction music was going and thought maybe we could get in and strike an honest blow. Will artists make more money? Even if it means less profit for our bottom line, absolutely. That’s easy for us. We can do that. Less profit for our bottom line, more money for the artist; fantastic.”
Meanwhile, Spotify is looking to make an IPO, with Goldman Sachs leading a $500m round of fundraising that would bolster the company’s worth to $8bn, the FT reports.