The road has always been rocky for Jay Z’s Tidal music streaming service, which was founded in March of 2015 along with the claim by its founders that the service would “forever change the course of human history” and is now valued at $150 million less than when its run began. It finally appears Tidal may be nearing the end, though, at least as far as its Jay Z days are concerned; Samsung, among others, is currently in serious talks to purchase the company.
In early 2016, Tidal experienced a huge shot in the arm when Kanye West and Rihanna released their albums The Life of Pablo and Anti as Tidal exclusives, the latter of which went Platinum. It was even enough to propel the Tidal mobile app to No. 1 on the iOS app store. But it was not enough to save the floundering service, which was deep in the red due to huge royalty bills every month and not enough subscriber dollars to cover them.
Although Tidal made an attempt to market itself as the music streaming service for artist exclusives, reports the New York Post, potential investors often expressed concern that the musical artists’ own label deals would get in the way of their promotion of Tidal exclusive content.
That combined with the fact that Tidal’s “lossless audio” streaming, which was its only other significant selling point, was not enough to justify its $19.99/month price tag, $10 a month more than popular Tidal competitors like Spotify, Google Play, or Apple Music, meant Tidal could just not thrive under Jay Z’s management.
“The pressure is definitely on,” recently reported an inside source, noting that in 2016, Tidal has been having trouble paying all of its artists’ royalty bills on time.
“Tidal certainly needs a new home to survive.”
Enter Samsung, who has both a long-running relationship with Tidal owner Jay Z, having bought a million copies of both Jay Z’s Magna Carta Holy Grail and Rihanna’s Anti to distribute to subscribers, and a failing music streaming service of its own, Samsung Milk.
This last bit is especially pressing, as Samsung’s main rival in the mobile industry, the company’s bread and butter, is Apple, and Apple has a very successful music streaming service of its own — worlds more successful than Tidal, which has only managed to net 2.5 million subscribers. Billboard reports Apple Music has amassed over 11 million subscribers in the six months since it was released — over four times what Tidal has accomplished in more time and with a greater initial investment.
Prospective Tidal buyer Samsung does not want to lose out name recognition by falling to Apple in the arena of music streaming, which could prove to be a large part of the mobile market, and so building up Samsung Milk’s library of exclusives by absorbing an exclusive-heavy music streaming service like Tidal could prove advantageous.
Rumors about a Samsung acquisition of Tidal began circulating several months ago when Tidal founder Jay Z was seen leaving Samsung’s Silicon Valley headquarters, reports Forbes, but now the Korean tech giant is back.
“Samsung is re-engaging; they are working on something really big, and they’re keeping it very quiet in case it leaks,” said a source involved in Samsung’s talks with Tidal.
The New York Post, the first source to report about Tidal’s 2016 acquisition deal, say that several other companies, including Google and Spotify, are also vying for Tidal ownership in order to build onto their own streaming services.
Tidal was originally valued at $250 million and may now be selling for $100 million, according to experts in the music streaming industry. That’s a 60 percent loss, so it’s safe to say that Tidal has been a complete failure. However, reports Hot New Hip Hop, Tidal’s owner, Jay Z, will likely still profit off the venture by seeing his original Tidal investment of $56 million grow when Tidal is purchased by the highest bidder.
[Photo by Evan Agostini/AP Images]