10 reasons Tidal is so doomed, not even Jay-Z can save it

tidal track edit why is doomed 004
We gave it our best shot, but after some deep soul-searching, we’ve come to a difficult decision: We’re breaking up with Tidal.

Between the constantly rotating door of executives, multiple flopped record releases, and a steady onslaught of lawsuits surrounding the company, the streaming music service is a complete mess. Over the past few months, we’ve been writing about Tidal as though it’s an industry contender, but if Tidal is anything it’s a force in pop culture, not the streaming game — a soap opera we tire of tuning into. And we don’t want to watch anymore.

Let’s be frank: The reason Tidal makes headlines is because Jay-Z and a few other high profile artists own shares.

Let’s be frank: The reason Tidal makes headlines is because Jay-Z and a few other high profile artists own shares. That’s not a good reason to write about a company that hasn’t been, and will probably never be, a real contender for streaming supremacy. Tidal headlines clog up the presses and bring undue attention to where music streaming is failing rather than where it succeeds. It’s a distraction from relevant services like Rhapsody — which still has three times the number of paid subscribers as Tidal — and SoundCloud and Bandcamp.

We take no joy in saying this, but it’s time we recognize Tidal is likely doomed. Here’s how things got to this point.

Tidal isn’t accomplishing what it set out to do

As professional reviewers of music and audio equipment at a tech-centered media company, the editorial staff at Digital Trends was probably more excited for Tidal’s U.S. launch than most. The service had forged partnerships with Hi-Fi companies like Sonos, Denon, and Harman/Kardon, and promised that it would become an essential — if slightly higher-end — part of the streaming music world.

In addition to better quality music, executives and its initial 18 musician-owners looked poised to deliver exciting exclusive content, with better pay and margins for artists — all of which appealed to enthusiastic music industry supporters like us. Those hopes and expectations haven’t been met, though. Sure, Tidal’s premium audio tier sounds better than its competition, but, as the LA Times notes, Tidal isn’t the poster child for artists’ rights it set out to be. In fact, many industry members would say that Tidal is actually fueling piracy.

Tidal Announcement
Kevin Mazur/Getty
Kevin Mazur/Getty

That’s because the argument Jay Z and his fellow stars made at the Tidal launch (including Nicki Minaj, Madonna, and Beyoncé) was fashioned from self-interest. They said that they, as big-name artists, deserve to set the price for their music. But the reality is that already established musicians setting a higher price point for their own music probably doesn’t help struggling artists.

Ironically, Tidal isn’t even the best streaming destination for the music of the 16 original artists who got three percent stakes in the company for endorsing it.

Tidal’s business model might be unsustainable

Tidal claims to be paying the vast majority of its revenue — and five times the amount per play as Spotify — back to artists and labels in the form of royalties. That sounds generous and progressive, until one realizes that larger music services don’t pay more because they simply can’t afford to.

Services like Apple Music, Rhapsody, SoundCloud, and Spotify all lose massive amounts of money each year. So how can Tidal stay afloat given they pay so much more for music and have a significantly lower subscriber count? The numbers, at least from a distance, don’t appear to add up.

Tidal has a history of tech troubles

Tidal accidentally charged users for subscriptions they had previously cancelled, which ruffled a lot of feathers. But that’s just the tip of the iceberg when it comes to the company’s tech troubles.

During the live stream of Kanye West’s The Life of Pablo, many users experienced serious streaming issues. Then, a few days later, those same people were mistakenly allowed to purchase the album for a brief period before it was pulled from the service. And — more on this later — that wasn’t the first time new material was accidentally posted early on the service.

Tidal is getting eaten alive by its competition

Tidal’s own artists are jumping ship in search of higher streaming and sales numbers at rival services, even when they’ve sworn they wouldn’t. Making that promise was a bad call, but diversifying is essential. The reality of the low-margin streaming music business is: more plays = more money, regardless of where those plays come from. Tidal can’t change that. The service may pay higher rates per stream than competitors, but its competition has exponentially more users, forcing most artists to embrace other services like Apple Music and Spotify, even if they pay less.

Such high turnover is an extremely bad sign for the health of any company.

For example, based on music streaming royalty reports, it takes 81,000 streams per month to make Federal minimum wage via Tidal, whereas it takes 242,000 Spotify plays to reach the same goal. Spotify requires more streams, certainly, but since it has over 10 times the number of paying users, musicians will likely make their nut much faster with Spotfiy than Tidal. And that’s just one alternate streaming service. Apple music only serves to increase the odds that a musician will bank significant revenue.

Tidal exclusives are a bad idea for any musician, large or small. Yet the company keeps pressing for them, resulting in an unintended yet very real consequence: piracy.

People don’t want Tidal so much, some may have turned to piracy

Kanye West’s The Life of Pablo is arguably the biggest-hyped exclusive release to ever hit a streaming service, and West’s choice to make it a Tidal exclusive boosted the company’s subscriptions significantly, if only temporarily. Unfortunately, the move also fueled music piracy because even more listeners refused to subscribe to the smaller music service just for one album — especially those already paying for Apple Music or Spotify subscriptions. Of course, any exclusive to only one streaming service could encourage piracy from those who use other services to stream. Streaming subscription services to have the effect of turning music into a series of walled gardens.

West threatened to sue The Pirate Bay (the internet equivalent of shaking one’s fist angrily in the air), then went back on his word and made the album available to every major service — probably around the time the first tiny Tidal royalty check arrived. (Oh, and then he was apparently caught using The Pirate Bay to steal music software.)

West’s little bait-and-switch move angered the swath of subscribers who signed up just to hear his new album, and now they are suing him.

And the drama has only begun.

They continuously botch huge releases

Industry experts knew Kanye West and Rihanna’s upcoming Tidal-exclusive releases would be two of the year’s biggest albums— great gets for a young streaming service whose subscriber numbers needed to see a big boost — but no one could have anticipated Tidal would botch them both.

Rihanna’s Anti ended up dropping on a Wednesday because the company accidentally posted the entire thing early, and Kanye’s The Life of Pablo, well … we published an entire article on  everything that went wrong with that horrendous release.

Beyonce Lemonade

Likely because of the previous botched releases, co-owner Beyonce chose to release her new record, Lemonade, exclusively on Tidal — of which she is part owner — for a single day, ultimately releasing the songs and movie for paid download on iTunes, and simultaneously releasing the associated documentary on HBO. Tidal is still the album’s exclusive streaming partner, but given that most other artists eventually distribute widely for more plays, that exclusivity is unlikely to last, no matter what the service currently claims.

Other streamers do exclusives better

The tide almost turned for Tidal when Beyoncé’s Lemonade set a new record for streaming plays in a week. But then Apple Music released Drake’s Views for exclusive streaming and iTunes download, and blew the hinges off of Tidal’s streaming record one week later. Views almost doubled Bey’s play count record in just five days.

As similarly popular artists who both have massive streaming draw, Drake and Beyonce’s experience is perhaps the clearest-cut example of why larger streaming services will win the battle for supremacy, regardless of what Tidal does to fight them.

They go through executives like seasonal fruit

Since it first opened its doors stateside in 2015, Tidal has gone through an extraordinary number of executives. The company has had three CEOs, recently fired its CFO and COO, and lost its original Chief Investment Officer and Senior VP of Label Relations last year. At this point, it’s almost easier to say which executives have left the company than who remains working there.

Executives of multi-million dollar international corporations are typically fairly experienced and educated business people. Such high turnover is an extremely bad sign for the health of any company.

Even Jay-Z wants his money back

The final straw when it came to our editorial team’s decision to dump Tidal had to do with a recent lawsuit from Jay-Z, who is suing the former owners of the service for alleged lies about subscriber numbers when he purchased the company. When the owner of a struggling company waits a year, then sues the people he bought it from, the company is in dire straits.

But if that weren’t enough to generate concern, this should: Samsung — the biggest corporate backer of many of Tidal’s biggest artists — doesn’t want to buy it.

We just wouldn’t pick Tidal over its competitors

After a year on the market, Tidal has more holes in its library than Spotify, it doesn’t give fans access to world-class internet radio like Apple Music, and it is clunkier and harder to find things on than both. And while it did decide to branch out into the video medium earlier than its competitors (who are expanding into original content themselves these days), streams are sometimes laggy and difficult to watch. Apple Music and Spotify allow users to add music from their own MP3 libraries, where Tidal does not. For us, that’s the ultimate nail in Tidal’s coffin: It just doesn’t function day-to-day better than its biggest competitors, and we don’t find ourselves ever recommending it to would-be streamers.

We’re calling it quits

We wish it weren’t this way. We wish Tidal was having a positive influence on the state of streaming music, and not dragging it down. We wish Tidal’s higher sound quality was enough to draw in tons of users who want more than Spotify and Apple can serve them. And, perhaps most of all, we wish Tidal could deliver on its promise to give a broad range of musicians better support and more pay. Unfortunately, today, Tidal instead looks a lot like it did at its awkward star-studded launch gala: Shiny and doomed.

Digital Trends’ mission has always been to help readers choose and use tech in their lives. Tidal isn’t one of our picks right now. We can’t recommend it to anyone, and we don’t see a bright future for the service at this time. While it would be irresponsible to swear off covering Tidal, we believe there are better music services that have a less cloudy future ahead of them. If you’re going to invest in a subscription streaming platform for your music, there are better options.

We reached out to our press contacts at Tidal, but the company didn’t respond to our requests for comment.

Updated on 05-19-2016 by Parker Hall: Updated to reflect the 10th reason we think Tidal will fail: It just isn’t as good as its competitors. We also tweaked some language. This is an opinion piece expressing our doubts about Tidal. We encourage readers to make up their own mind about whether to pay for it or not.

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.

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