Jay Z's TIDAL: Does Name Value Produce Customer Value?

Across promotional interviews, the introductory press conference and a high-profile new television spot, the artists behind the new TIDAL streaming service speak with strong sentimentality. They speak with a passion for breaking with the status quo. They speak with a desire to take a stand.

Of what they do not speak – and what makes the proposition very interesting – is how the customer will benefit. For a company operating in today’s "age of the customer," TIDAL is decidedly silent on the tangible value it creates for those customers.

The question: does TIDAL need to articulate that value?

Protecting business interests without sacrificing customer interests

When music superstar Taylor Swift famously pulled her music from free streaming services and spoke out against the manner in which they devalue art, she did not instantly put those services out of business. She did not prompt customers to ignore this new normal of the music business. She did not even prompt many music industry cohorts to follow suit.

She did, however, create industry dialogue around the nature and sustainability of streaming. The shift from an a la carte music model to an all-encompassing streaming one is clearly underway, but stakeholders cannot simply watch that journey happen. They need to guide it by assuring that music, despite operating within a different fee and consumption framework, still possesses its value. They need to guide it by assuring that stakeholders, despite receiving compensation in a different way, still receive appropriate financial rewards and motivations for their work.

Largely absent from that conversation, however, was a discussion around how content creators will simultaneously add value for customers.

When it comes to the current state of music streaming, one of the greatest priorities involves shifting customers from free, ad-supported streaming models to premium ones. This "Netflix model"—paying a monthly fee to stream the contents of the library—is seen as a way to honor the changing marketplace while still protecting the value of music and assuring sustainable revenue for creators. Most within the music industry accept streaming as the future, but they are absolutely not accepting that free streaming needs to be the future.

The challenge involves figuring out how to facilitate that shift. While businesses have techniques for encouraging shifts to premium tiers (such as offering free trials with automatic renewals), their goal (and urgent need) involves making the case from a value standpoint.

For $9.99/month, Spotify offers premium customers the ability to play any song they want on demand, download music for offline listening (which becomes tantamount to owning it in today’s digital/mobile world), listen without ads and access higher-quality streams. Certainly substantive, those features—alone—have not been enough to drive optimal levels of premium conversions. They have not at all eliminated interest in the free tier.

Other streaming providers focus more heavily on elements like curated playlists and access to music videos, but those features have also failed to neutralize interest in free services.

Lack of success has not spurred urgency in identifying the features that will move the needle. It needs to start doing so.

Ahead of Monday’s press conference, one burning question existed: how would TIDAL help substantially accelerate the shift from free to premium? How would its unique value proposition help strip free services of their appeal?

Thus far, the only notable answer is celebrity flair.

Far from a TIDAL Wave

Led by Jay Z, a list of celebrity acts including Alicia Keys, Madonna, Rihanna, Nicki Minaj, Calvin Harris, Coldplay, Jack White, Daft Punk and Jason Aldean claims an equity stake in the service. Spanning most genres and containing some of the industry’s biggest stars, the celebrity list is impressive – and enough to generate early buzz in the TIDAL Service.

Given the immense, loyal fan networks possessed by each associated artist, it also creates a built-in audience for the service. Aware that streaming services like Spotify have caught heat from famous musicians, a loyal Rihanna or Madonna fan would presumably position the celebrity-endorsed TIDAL at the center of his radar.

And if someone will buy clothes or perfume because one of these musicians put his or her name on it, logic says they should do the same when it comes to an actual music service.

While the involvement of high-profile artists has already resulted in some exclusive content—and will surely drive more moving forward—the value of those exclusives has not been articulated in a manner that will make waves. It is more presumed than it is demonstrated. Since customers are being asked to switch from a free model to a paid one, presumption might not be sufficient.

The main takeaway, at this point, is that celebrities are involved.

Can branding be everything?

Sadly, branding is all that TIDAL makes clear (lossless audio, its one other unique selling point, only exists on a heightened $19.99 price tier and is thus not functioning as a direct benefit over services like Spotify and Google Music).

Thus far, the official material has failed to establish a substantive superiority over existing services. It has failed to demonstrate a break with the traditional approach to streaming. It has failed to demonstrate a drastically different approach to the way customers access the library of music. It has failed to demonstrate why the user experience is actually better. It has failed to demonstrate why someone who failed to see the substantive value in upgrading to Spotify’s premium tier would instantly recognize such value in TIDAL.

The involvement of big-name musicians is the sole hook. And while that has clear marketing value, it also raises some interesting—and potentially damning--questions about the culture of the product.

Art vs. technology is a common thread of the TIDAL promotional material. The celebrity backers stress the importance of allowing musicians—not tech companies—to drive a music service, and they stress how that will restore art to the process.

While that potentially has appeal for other musicians who would rather work with musicians than non-musicians, it does not necessarily demonstrate a customer-centric notion. Are customers complaining about the quality of music—and curation—on existing streaming services? Do they feel existing platforms put technology above music?

And what if customers actually want an expert in streaming technology and user interfaces to design the streaming service? While they would not necessarily trust a "techie" to create art, they might be more inclined to trust him to create a platform for enjoying that art.

(We know TIDAL, which is an Aspiro service, relies on them, but the public press conferences have downplayed the role of technology experts)

Moreover, does enlisting a group of celebrity musicians really confirm the platform will be all about the music? We know these high-profile performers have profit participation, but what about songwriters and engineers? What about independent artists who rely on streaming to build their fanbases? How will their compensation improve?

In focusing strictly on high-profile artists and their equity, TIDAL has avoided some of the key questions that made streaming such a hot topic in the first place. It has not necessarily achieved buy-in from the entirety of the music community. And without that buy-in, it has not necessarily even piqued the interest of those who truly see the merit in a music-first streaming service.

Anyone can create a streaming service that caters to big hits from superstar musicians. The soon-to-be relaunched Apple Beats is, for instance, a shoo-in to do so.

A program focused on art rather than technology would demonstrate how it actually moves music forward. It would demonstrate how the program satiates the thirst of music lovers in a way other streaming programs cannot. It would create unique experiences to bring fans closer to (all) artists and (all) artists closer to fans. It would render the freemium streaming model laughable to music fans.

TIDAL does not do that. It puts a different, more musical face on streaming, but it does not necessarily create a different, more musical streaming experience?

The success or failure of TIDAL will reveal the extent to which the value of the former measures up to the value of the latter.