Jay Z’s attempt to save the music industry was a miscalculation. Mainly because of the marketing blunder. Also, the economics of streaming is brutal. After nine months and three CEOs later, TIDAL will be switching its focus to TV streaming.
The high fidelity streaming service boasts 1 million paying subscribers. Yet, this move is not about gaining more subscribers, but developing and licensing content that keeps the subscribers that they have.
One of the assets that the $56 million sale came with is the capacity for video streaming —an advantage that industry-leading competitor Spotify didn’t even have at the time.
TIDAL executives are betting that video could be the ace that pulls them out of their slump. With urban-based shows like Money & Violence and No Small Talk, critics point out the latest video offerings from the company focus on the urban market, and wonders if TIDAL should just focus on urban millennials.
Pre-Jay Z, TIDAL was positioned for the audiophile. The Swedish streaming company was known for its CD-quality sound. To appreciate the difference in sound quality, one needed to have top tier headphones. It made sense for TIDAL to offer the streaming service for $19.99/month because few music streaming services offered this level of sound quality.
Yet, one of the unintentional consequences of the purchase was the backlash of the high price for the service, making Jay Z and his legion of elite artists seem out of touch with the reality of the market.
The quest to fulfill Shawn Carter’s utopian vision of the music industry is at stake. And TIDAL’s new CEO, Jeff Toig, has his work cut out for him. His charge? To clean up the mess. He will have key assets at his disposal, such as access to A-list and up and coming artists, the live streaming of events and exclusive content. No matter how it pans out SCE (S.Carter Enterprises) LLC could sell the company and still make a substantial profit.
