Is the tide turning for streaming services?

With latest figures from the IFPI’s Digital Music Report 2015 showing an increase in subscription revenues of 39% and subscription services now accounting for 23% of the digital market, it was only a matter of time before other major players besides Spotify started to take notice of the streaming industry.

The power couple Jay Z & Beyoncé recently launched TIDAL, - a new subscription service, hoping that high quality audio and exclusivity will be the key to winning consumers.  Apple Music is also relying on exclusive content, 24/7 radio shows curated by superstar DJs as well as a social network element. Not one to back down, Spotify recently increased its free trial to 3 months and will soon venture into video as well as audio streaming. So, how is the battle shaping up so far, and will one provider’s offering mean they end up riding the wave of streaming success over the others?

Things have not gone smoothly for TIDAL so far. First there was the cringe-worthy celebrity filled press conference, followed by the exclusive first look at the video to Madonna’s new single which also flopped due to technical issues. Currently it looks as though TIDAL could have a hard time winning this battle. The company is relying on the hope that the average consumer cares enough and is knowledgeable enough about sound quality (and also has the gear expensive enough) to be able to tell the difference between lower and higher quality sound files and is therefore willing to pay more for it. It seems unlikely that the average consumer is such an audiophile and therefore won’t really benefit from this and TIDAL will need to offer more. See if you can tell the difference in quality here.

TIDAL’s second ace up their sleeve is exclusive content, which is also a feature Apple Music will be relying on. However, unless they’re really taking this to new levels of content or experience, this could be somewhat of a hard sell for today’s consumer. In the contemporary music marketplace, what is exclusive on one platform one minute is easily illegally uploaded and streaming on another the next. Furthermore, an artist who has signed supposedly exclusive content to one platform could receive a backlash from fans about access and so proceed to put it on a rival platform to stream for free soon after. This has already happened with both Madonna and Rihanna, thus rendering paying for the ‘exclusive’ access a rather weak argument. After all, royalties from advertising and video views can be a substantial income for record labels and their artists so it is in their best interests to gain maximum exposure, potentially resulting in a conflict of interest between them and a subscription service. However, with TIDAL now including a ticketing feature powered by Ticketmaster giving subscribers early access to music concerts and festivals, paired with Jay Z’s multi-million pound deal with Live Nation which run many of the world’s biggest music stars’ shows, this could be one area which could help TIDAL stay afloat unless Spotify or Apple Music can offer something similar.

Beyond exclusive music content, TIDAL is also hoping to win subscribers by offering exclusive access to artists via features such as knowing when an artist is using TIDAL and listen to what they’re listening to. Apple Music is also pushing its Connect feature as their social element and a way to differentiate itself from competitors. Their press release states – ‘Candid shots from backstage. In-progress lyrics. A rough cut of a new video. Here, artists can share just about anything they want’, but this sounds a lot like what artists use their already established Facebook and Twitter profiles for.

So, with Apple Music’s service launching on 30th June, it will be interesting to see how their numbers compare to take-up of TIDAL and what effect this will all have on Spotify’s 75 million (20 million paying) subscribers. It’s likely that unless either can really offer some exciting exclusives beyond songs or videos, or DJ Zane Lowe and co. can make Apple Music’s Beats 1 radio enough of a draw, we are people of habit and the majority of those who have Spotify will stick to it and those who don’t pay to access music will continue to not do so. However, as Facebook famously did with their $1 billion Instagram acquisition or as Google have done by acquiring 32 companies in the last year, perhaps as industry competition gets more fierce, in the end exclusive content access won’t really matter: the winner will be the one that can afford to buy out the competition and effectively silence them in that way. That, or Taylor Swift will wade in and tell them all how it should be done.