Apple in Talks To Buy Streaming Service Tidal -- WSJ
July 01 2016 - 3:03AM
Dow Jones News
Tech giant explores deal to bolster its music service and tap
Tidal's ties to popular artists
By Daisuke Wakabayashi, Hannah Karp and Patience Haggin
Apple Inc. is in talks to acquire Tidal, a streaming-music
service run by rap mogul Jay Z, according to people familiar with
the matter.
Apple is exploring the idea of bringing on Tidal to bolster its
Apple Music service because of Tidal's strong ties to popular
artists such as Kanye West and Madonna.
The talks are ongoing and may not result in a deal, these people
said. Terms of the potential deal aren't known.
Jay Z bought the service in March 2015 for $56 million from
Swedish company Aspiro, which had created the brand Tidal. He has
given 19 famous artists and bands small stakes in Tidal and
promised each millions of dollars worth of marketing, according to
people familiar with the matter.
A Tidal spokesman said Tidal executives hadn't held talks with
Apple.
Tidal charges $20 a month for a high-fidelity version of its 40
million-song catalog or $10 a month for standard-quality sound.
Tidal said it has 4.2 million paying subscribers, most of whom it
amassed this year with a string of exclusive releases from stars
including Mr. West, Rihanna and Beyoncé, who is Jay Z's wife.
Tidal is also the only service offering the catalog of the late
pop star Prince, who was wary of other streaming services but had a
close relationship with Jay Z. Prince died in April at the age of
57 of an overdose.
But the company has experienced management turmoil, churning
through three chief executives, one of them interim and one
appointed by prior management, in less than a year. Jeff Toig,
former chief business officer of SoundCloud, a Berlin-based
audio-sharing service, has been CEO since January.
Though it hasn't generated significant revenue for the industry
given its relatively low subscriber numbers, Tidal has an
artist-friendly reputation, thanks to its artist ownership,
high-quality sound and the fact that it only offers paid
subscriptions, which generate far more for the industry than
ad-supported services.
Spotify AB, by contrast, the subscription-streaming leader with
about 30 million subscribers and about 70 million free users, has
irked some stars by refusing to let them limit their music to its
paid tier. As a result, artists such as Taylor Swift and Adele have
withheld new releases from the entire service, with Adele only
making her 2015 album "25" available on Spotify this month.
Tidal has held exploratory talks beginning last year with other
potential partners, such as the streaming service Rhapsody,
according to a person familiar with the matter. Rhapsody recently
changed its name to Napster.
The news of the talks comes about a year after Apple launched
its own streaming music service, Apple Music. Apple said on June 13
that it had 15 million paying subscribers to the service, which
costs $9.99 a month for individuals, or $14.99 a month for
families. The same day, Apple said it would redesign Apple Music in
the fall as part of an update to its iPhone software, to address
complaints that the software was confusing and hard to
navigate.
Apple Music was based on the streaming service Beats, which
Apple acquired with headphone maker Beats Electronics for $3
billion in May 2014. As part of the deal, Apple acquired the
services of rap star Dr. Dre and music mogul Jimmy Iovine, who have
played critical roles in warming the music industry to Apple's
music service.
A deal with Tidal would bring two of the most legendary names in
hip-hop to Apple's camp, uniting East Coast and West Coast rap
under a single business interest.
There might be areas of friction as well. Tidal executives pride
themselves on giving artists unusual freedom, such as tinkering
with their music after releasing it, a person familiar with the
matter said.
Apple has been working to secure close relationships with
recording artists. It has provided marketing assistance to artists,
while also helping to pay for music videos for high-profile artists
in exchange for a certain period of exclusivity on Apple Music.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com,
Hannah Karp at hannah.karp@wsj.com and Patience Haggin at
patience.haggin@wsj.com
(END) Dow Jones Newswires
July 01, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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