Posted Apr 24th, 2015 (2:57 pm) by Matt Felten
Tidal Owners
Tidal Owners
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Less than a month out from launch, Jay-Z's premium streaming service Tidal is already losing steam. After briefly touching the top 20 list for U.S. iPhone app downloads, the 56 million dollar pet project has plummeted out of the top 700. Even Kanye West, a long-time friend and collaborator with Jay-Z, has abandoned ship, removing all reference to Tidal from his Twitter account. But, more importantly than how it's failing, is why.

The $20 price point (even though there was a $10 one)

Damn Jay, you forgot the first rule of marketing! Consumers are irrational. Tidal's core business model was this: $10 per month for “High Quality” 320 kbps streaming (that's actually pretty much industry standard, but whatever) and $20 per month for “HiFi” lossless 1411 kbps Flac streaming. Here's the problem: potential customers saw that $20 price tag and went “$20?! That's twice as much as I pay for Spotify! Screw that man.” It didn't even matter that the $10 option was there, because it was overshadowed by that menacing 20.

The UI

One of the biggest complaints we've consistently heard is about Tidal's user interface. Many think it's actually a pretty shameless plagiarism of Spotify's UI, but without nearly as many of the features. Even if it technically wasn't plagiarism, it looks very similar, which was a bad move for a service trying to set itself apart from other streaming services as much as possible. The lack of an app with offline capabilities was also a problem for some.

The HiFi offer is bogus

Unless you have extremely expensive, finely calibrated speakers, the audible difference between 320 kbps AAC and 1411 kbps Flac is essentially nonexistent. Read more about it here.

Too many target markets, poor understanding of customer base

The big problem with trying to reach everyone at once with your marketing efforts is you end up with a product that is not firmly grounded on any front. Tidal attempted to reach:

1) The common listener.

The common listener just wants music. Cheap music. Not only does Tidal seem hyper-expensive because of their $20 option, but they have no free version whatsoever (besides the free 1-month trial). Plus, their $10 option is essentially the same as Spotify, so there is no incentive for someone currently paying for Spotify to switch over.

2) The audiophile

The audiophile is a fairly niche group with a very particular taste. Audiophiles covet the collectibility and tangibility of their music, which only exists in vinyl and CD formats. Tidal offers the expensive HiFi option, but it will never be able to recreate the feeling of ownership that comes with vinyl and CD.

3) The indie-musician sympathizer

Hey! Guess what? We are going to help the independent artist get paid more for their hard work! Here's Nicki Minaj, Rihanna, and Kanye West to explain how it works!

Honestly, the most baffling part of this whole situation is that Jay-Z thought it would be a good idea to have a group of millionaire artists as spokespeople for this app. How are you going to connect with the indie-loving consumer when they are being promoted to by the upper echelon of music? A much more effective approach would have been Jay-Z as the one celebrity spokesperson, and a much larger group of independent artists at his back.

In the process of trying to appeal to all three of these potential customer segments, they did not think thoroughly enough about what each of these segments was really looking for.

After news got out that Tidal is taking a turn for the worse, a representative of the company sent out a press release announcing the replacement of CEO Andy Chen by Peter Tonstad, as well as the “clear vision” they now have for the future:

“We've eliminated a handful of positions and refocused our company-wide talent to address departments that need support and cut redundancies," the Tidal rep said. "Tonstad has a better understanding of the industry and a clear vision for how the company is looking to change the status quo," the rep continued. "He's streamlining resources to ensure talent is maximized to enhance the customer experience."

Sounds a bit more like “frantically cost-cutting” than “Streamlining,” but we won't write Tidal off just yet; parts of the company's core mission does come from an honorable place. However, Tidal has a very small window of time to make changes and come up with an app that is comparable if not superior to Spotify's, do away with the HiFi bull-crap, and develop an image that aligns with their mission. If they fail to do this, it's a good bet that most users will stick with Spotify or other less expensive, already proven alternatives once their free trial month is up.

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