Tidal to redefine music streaming

On a glitzy stage in downtown New York, rap mogul Jay Z stood flanked by a cadre of A-list artists from music's most popular genres to unveil what the star-studded group billed as an industry game changer.

They were there to relaunch Tidal, a music-streaming service that was quietly rolled out last October before Jay Z, whose real name is Shawn Carter, acquired 90 percent of its parent company for $54 million (50.1 million euros) earlier this month.

Entertainment heavyweights Kanye West, Nicky Minaj and Madonna were some of the personalities that stood to Jay Z's right. Those to his left included the masked electronic duo Daft Punk, and his wife, Beyoncé.

Tidal's fresh debut at the press conference in Manhattan highlighted the dichotomy of musicians' frustration over what they view as unfair compensation for their work, and consumers' unwillingness to pay for something that is readily available for free.

#TIDALforALL

Just as CD sales plummeted after the inception of music downloads, so have those downloads slowed as more users turn to digital streaming services. And as music becomes more readily available, its market value has dropped.

An unwillingness to pony up money for music was quickly apparent on social media as many people on Twitter lampooned the line of wealthy celebrities for seeming to conflate a subscription to Tidal with a moral imperative.

But if the social media backlash revealed anything, it was that most users forget that declining royalties affect smaller, lesser known - and far less wealthy - musicians too.

At least one poll revealed that most users would not pay $19.99 per month to stream music, which is what Tidal will charge for its high fidelity service. A less expensive version for $9.99 offers regular sound quality.

Music's diminishing value

All of the artists around Jay Z are shareholders in the nascent service that, according to Alicia Keys, who spoke for the group, will put artists' interests first.

"Our mission goes beyond commerce and technology," the R&B singer said. "We believe it is in everyone's interest - fans, artists and the industry as a whole - to preserve the value of music."

The unveiling of Tidal was the latest development in an often acrimonious scuffle between artists, record labels and powerful streaming music companies.

Many musicians contend that people's respect for music as a commodity, for which its creator deserves fair compensation, has ebbed. They also take issue with many streaming services' business models, some of which first offer free access to music in the hopes of luring users to eventually pay for premium subscriptions.

Their discontent comes despite the fact that streaming music has quickly become the music industry's fastest-growing source of revenue, with Spotify alone having paid out more than $2 billion in royalties since its inception in 2006, half of which was paid out in 2014 alone.

Spotify has said it pays music rights holders an average of between $0.006 and $0.0084 per stream, although the company has emphasized its view that "per stream" metrics were inherently flawed.

A crowded sector

Tidal's debut also marks the addition of another player to an already crowded sector. It will compete with other online music platforms with well established user bases, such as Sweden's Spotify, US-based Google Play and Rhapsody, and Paris-based Deezer.

Apple, which recently acquired Dr. Dre's company Beats for $3 billion, is also expected to launch its own music-streaming service in June.

But as Jay Z as well as executives from his sports and music promotions company, Roc Nation, have made clear in interviews, Tidal isn't looking to dethrone any industry frontrunners.

"I don't have to lose for you guys to win," Jay Z told Billboard Magazine.

Artists' main contention with companies like Spotify is that their royalty rates are too low. That friction came to a head last year when Taylor Swift pulled all of her music from the streaming service.

To combat that, Tidal's ownership will reportedly be divided among more than a dozen shareholders, including the artists who were at the press conference on Monday, although the exact financial details have not been disclosed.

The "Financial Times" reported that Tidal was offering a mix of stock and cash to its owners in exchange for the rights to exclusive promotion of some new music and videos, although it wouldn't include rights to music.