Apple is in “exploratory talks” to purchase Jay Z’s streaming music service Tidal, according to insiders. Apple is said to be interested in augmenting its Apple Music service with top artists associated with Tidal including Madonna and Kanye West. Tidal landed a number of high profile exclusive releases this year from West, Rihanna and Beyoncé. It is also the only streaming service to feature the catalog of the late pop star Prince. Tidal says it presently has 4.2 million subscribers who pay $20 per month for the high-fidelity version of the service or $10 per month for the standard-quality version.
Apple Music, which has announced a redesign for the fall as part of its iOS updates, has 15 million subscribers.
“Jay Z bought the service in March 2015 for $56 million from Swedish company Aspiro, which had created the brand Tidal,” reports The Wall Street Journal. “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.”
Despite the high profile names associated with its service, Tidal has reportedly suffered from management turmoil. However, many artists prefer the company’s business model, especially in regards to only offering paid subscriptions (by comparison, ad-supported Spotify has 30 million subscribers and about 70 million free users).
Chart-toppers such as Taylor Swift and Adele have notably kept releases from Spotify since they do not have an option to limit their music to a premium tier (although Adele just recently made her album “25” available on the service).
Tidal has been in talks during the last year with other companies, including Rhapsody (which recently changed its name to Napster) and Samsung. Talks with Apple are early and may not lead to a deal, but since other discussions fell apart, Apple may be in a solid position to acquire the struggling Tidal.
“One thing seems certain,” notes Recode. “This is a different situation from when Tim Cook, Eddy Cue and company paid $3 billion for Beats two years ago. Then, it was acquiring several executives, including Dr. Dre and Jimmy Iovine, plus the Beats Music team and a hardware business that was selling lots of expensive headphones.”
“Tidal, on the other hand, has much less to offer,” suggests Recode. “In some ways, it would be a tuck-in; in others, a take-out.”