Latest reports suggest that Apple Inc intends to acquire Tidal, a music streaming service owned by rapper Z with a view to provide a boost to its Apple Music. Apple is interested in Tidal as it is backed by popular artists like Madonna and Kanye West.
Currently, exploratory talks are on between Apple and Tidal, The Wall Street Journal reported citing sources familiar with the development. While the terms of a potential deal are not known, the sources hinted that the talks may not lead to a deal. On the other hand, a spokesman from Tidal told the publication that their executives did not hold any talks with Apple.
A Swedish company called Aspiro launched Tidal in 2015 and acquired by Z in January 2015. He re-launched the streaming service in March 2015. Currently, Tidal is a subscription-based music service with 4.2 million subscribers, who have the option of subscribing the premium service for $9.99 per month or the HiFi service for $19.99 per month.
Major competitors of Apple Music, Tidal and Apple have often clashed over different issues. For instance, although Apple was in talks to release Kanye West's album "The Life of Pablo," the hip hop artist eventually withdrew from the talks and debuted his album on Tidal.
While Tidal has not been able to generate noteworthy revenue for the industry, considering its moderate subscriber numbers, the streaming service does have an artist-friendly reputation. Much of this is attributed to its artist ownership and high-class sound. Moreover, it only offers paid subscriptions, which creates much more for the industry compared to ad-supported services.
On the other hand, two years ago, the Cupertino tech giant acquired Beats for $3 billion. At that time, the company acquired a number of executives like Dr. Dre and Jimmy Iovine, in addition to the Beats Music team as well as its hardware business selling expensive headphones, Recode reported.
So, the question is why Apple is interested in buying Tidal when the latter has very less to offer compared to Beats. Although Tidal has 4.2 million paying subscribers compared to Apple Music's 15 million, the Cupertino tech giant cannot just move them over to Apple Music automatically. It would require persuading the existing Tidal subscribers to switch over to Apple Music.
Many industry watchers believe that Apple's biggest gain in acquiring Tidal will perhaps be taking off Tidal from the market as a competitor for artist exclusives. In other words, Apple will also acquire Tidal's deals with artists and would no longer be concerned about its inability to stream albums exclusively. However, typically such artist and label deals with the streaming service are likely to expire after acquisition.
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