Tech giant Apple is currently in talks with streaming service TIDAL to acquire the platform and use it to bolster their own service, Apple Music, according to sources close to the matter. Although negotiations are still underway, and confirmation and terms of the deal are still unconfirmed, Apple’s streaming efforts would surely stand to benefit from TIDAL’s exclusive relationships with various high-profile artists like Kanye West and Madonna.
The issue of artist royalties from streaming has become more and more pertinent in recent years as the record industry has shifted away from purchased digital and physical units and toward a more streaming-based model. With declining record sales, artists now have to make the majority of their money from touring, and many feel that this may have an overall negative effect on the quality and quantity of new music that new artists are able to bring to fruition. Hip Hop mogul Jay Z purchased TIDAL in March of 2015 for $56 million in an attempt to route a larger portion of the proceeds from music streaming to the artists rather than large corporations.
As Jay Z said in an interview with Billboard following the purchase, “For someone like me, I can go on tour, but what about the people working on the record, the content creators and not just the artists? If they’re not being compensated properly, then I think we’ll lose some writers and producers and people like that who depend on fair trade. Some would probably have to take another job, and I think we’ll lose some great writers in the process.” Jay sold equity stakes in the company to nearly twenty other artists, marketing the endeavor as the first artist-owned streaming service and offering perks like exclusive releases for paying subscribers. The infographic below, via Information Is Beautiful, which shows the disparities between artist payouts for streaming between the various competing services, illustrates Hov’s noble intentions in purchasing TIDAL:
However, Jay’s big plans for TIDAL have not gone as well as expected. A year after the purchase, TIDAL’s subscription numbers are well below expectations, still trailing Apple and Spotify‘s services by considerable margins, leading to a smaller net payout for artists via TIDAL despite their higher per-stream rates. Furthermore, a handful of artists have brought legal action against the company for problems with payment. Earlier this year, John Emanuele from the band The American Dollar filed a class-action suit claiming that TIDAL has yet to compensate the band for any of the royalty payments accrued from the streaming of the band’s 116 copyrighted songs on the platform. This has prompted Jay Z and Tidal to mount a concurrent suit against the company that sold them the service last year, saying that the user numbers they presented were fraudulent.
Despite publicly remaining behind his venture, Jay Z has been shopping the company around to big tech companies for months, having reportedly taken meetings with Facebook and Samsung as well. While it is unclear how Apple would incorporate TIDAL’s current structure into their own efforts, if Apple does end up purchasing the company, the already-competitive streaming industry will become an even smaller club, consolidating more power with fewer large corporations and making it harder and harder for artists to change the status quo, as Jay and his partners originally sought to do with TIDAL.