Tidal Forecasts Strong Revenue Increase In 2016
16 Jun 2016
The struggle has been seismic for Jay-Z’s Tidal music streaming platform since its launch in 2015. Recent figures however, suggest that it could be turning the corner in terms of its rising number of monthly subscribers.
In March of this year, the Bangkok Post were one of the first to report the news that Tidal had reached the milestone of 3 million monthly subscribers, with it’s paid tier spanning in excess of 46 countries globally, showing that Tidal is starting to gain momentum in its efforts in challenging premium streaming giant, Spotify.
It’s been a big year for Tidal so far, with the exclusive streaming of Kanye West’s new album ‘The Life of Pablo’. One thing Tidal haven’t lacked since their inception is a long list of high profile musicians endorsing their service. The likes of the aforementioned Kanye West, Madonna, owner Jay Z and wife Beyoncé, Rihanna, Coldplay and Nicky Minaj have all showed their support for Tidal as reported by BuzzFeed.
The on-demand music service had a troublesome start though, regardless of its recent surge in subscriptions. It’s vow “to change streaming to benefit artists” seemed to have fallen on deaf ears with the company using the “richest names in music” to promote its services instead of fledgling artists building a name for themselves. It did however promise to showcase 1,000 tracks by unsigned artists, though any physical evidence of any of these artists wasn’t on show to the public during the launch – instead music royalty was paraded in front of the media and any other onlookers who tuned in to see Jay Z’s latest business venture see the light of day.
While attracting some 3 million subscribers shows a huge improvement on 2015’s balance sheets, it is still a far cry from Spotify’s devoted 30 million paying customers. Additionally, Tidal have been overtaken by Apple Music, which has garnered 11 million subscribers in its brief tenure operating in the streaming industry.
This year, as mobile sales and Internet connectivity increases, many media outlets are expecting a shift in the market share between Spotify and Tidal. Whether the emphasis will be on aiding up-and-coming musicians remains to be seen but some feel Spotify may have reached their ceiling.
There will also be a host of other variables to consider in the music industry in 2016. Vinyl sales remained strong last year and are forecasted to continue rising in 2016 and beyond. We’ll see the reforming, and re-emergence of some of the best bands in the world. Radiohead are likely to return with a new album and are presumably set to continue to shun streaming services as part of its initial release strategy. Additionally, legendary rock band Guns N’ Roses will reform to play Coachella, record a new album (which is unlikely to appear on Tidal or Spotify), they have already released a raft of merchandise, including selling the rights to leading online slots provider Spin Genie who recently launched the successful Guns N’ Roses-themed game. Additionally, the band have been reportedly been demanding $3 million-a-show. All of this has the potential to take the light off the streaming services and shift the focus to the more traditional forms of music through tangible physical products.
While 2016 definitely looks promising for Tidal, the struggle certainly isn’t over yet. Huge financial outlays on launches such as ‘The Life of Pablo’ would not have been cheap and the streaming service will need to see sizeable returns sooner rather than later.
That said, the recently released IFPI report may have some welcoming news for Tidal and others, revealing, “streaming revenues were up 45.2%, helping to drive 3.2% global growth.” The report also suggested that, “music consumption is exploding globally, but the ‘value gap’ is the biggest brake on sustainable revenue growth for artists and record labels.”
With digital sales contributing 45% towards global music sales, the industry expects a proportion of that to shift to streaming due to the ease and low cost to consumers. News like this will no doubt help Tidal grow in the remaining months of 2016, however their ability to innovate will be a deciding factor as to whether they can steal subscribers from Spotify and wrestle more revenues from digital sales across to their monthly subscription service.