Tidal case study

1. Kevin Yoo, Information Systems | Supply Chain Management
Brian Yuwen, Information Systems | Marketing // Analytics
MKTG3524
Dr. Jayson Shi JIA
17 April 2018
3035506390
3035506364

2. 1. I N T R O D U C T I O N
2. C O M P E T I T I O N
3. S I T U A T I O N
4. R E C O M M E N D A T I O N
5. C O N C L U S I O N
2A G E N D A

3. 3T I D A L // S T R E A M I N G
5 0
M I L L I O N
S O N G S
2 0 0
T H O U S A N D
V I D E O S
5 2
C O U N T R I E S

4. 4T I D A L // V A L U E P R O P O S I T I O N
L O S S L E S S
Q U A L I T Y
E X C L U S I V E
C O N T E N T
A R T I S T
S U P P O R T

5. 5T I D A L // N U M B E R S
U S E R S
3M subscribers
V A L U E
$600M USD valuation
Sprint purchased 33% of TIDAL in
early 2017 for $200M USD. (Fortune,
September 2017)
M A R K E T
2.2% market share
In 52 countries. (Based on December 2017
subscriber count and December 2016total
subscriber market)
TIDAL offers only subscription-based
services. (Fortune, September 2017)

6. 6C O M P E T I T I O N // S P O T I F Y
U S E R S
70M+ subscribers
M U S I C
35M+ songs
With over 2B playlists. (December 2017)
M A R K E T
43% market share
In 65 countries. (based on December 2016
subscriber count and total subscriber market)
160M+ active users. (December 2017)

7. 7C O M P E T I T I O N // A P P L E M U S I C
U S E R S
21M+ subscribers
M U S I C
30M+ songs
With certain Apple Music exclusive
content. (December 2017)
M A R K E T
15% market share
But growing the fastest in 2016.
(based on December 2016 subscriber count
and total subscriber market)
$900M+ USD in revenue. (December
2016)

8. Overshadowed by industry goliaths, music creators
and music consumers alike flock to other options.
8S I T U A T I O N // A W A R E N E S S
Awareness.
TIDAL lacks the recognition.

9. 9S I T U A T I O N // U S E R S
With just a fraction of the market share of Spotify
and Apple Music, TIDAL has a lot of catching up to
do.
Users.
TIDAL lacks the user base.

10. 10S I T U A T I O N // P R O D U C T
Users have said that they prefer the interface of
Spotify and the ease of integration with Apple
Music—the UX is smoother.
Product.
TIDAL lacks the experience.

11. R E C O M M E N D A T I O N 11
01 | Influencer marketing
02 | Partnerships
03 | Market skimming
04 | Product changes

12. 12R E C O M M E N D A T I O N // I N F L U E N C E R M A R K E T I N G // M A C R O
01
Influencer marketing.
With macro-influencers.
TIDAL’s list of artist-owners includes: Beyoncé,
Calvin Harris, Daft Punk, J. Cole, JAY Z, Kanye
West, Madonna, Nicki Minaj, Rihanna, and more.

13. 13R E C O M M E N D A T I O N // I N F L U E N C E R M A R K E T I N G // M I C R O
Micro-influencer marketing as a whole is amping
up; micro-influencers deliver 60% higher content
engagement and more than 20% more social buzz
while still being almost 7x more cost-effective per
engagement.
Influencer marketing.
With micro-influencers.

14. 14R E C O M M E N D A T I O N // I N F L U E N C E R M A R K E T I N G // W H Y
01 | Contagion factor of macro-influencers
02 | Virality of social networks
03 | Social sources lead to improved results
04 | Highly influential and the highly susceptible
05 | Engagement rate with micro-influencers
Social influence.
Why it could work.

15. 15R E C O M M E N D A T I O N // P A R T N E R S H I P S
Identify key players and organize joint releases or
features to promote TIDAL to those who crave
lossless audio.
02
Strategic partners.
Tap into the audiophile market.

16. 16
Vsonic Vision-Ears Focal Brainwavz Bose
Beyerdynamic Audeze Hifiman Sennheiser Tascam
FLC Aurvana Audio-Technica Soundmagic Etymotic V-
MODA Ultimate-Ears Questyle RHA ifi AKG Violectric
NAD Schiit Philips Fostex Westone FiiO Superlux Shure
Koss Darkvoice Custom-Art Sony JDSLabs
R E C O M M E N D A T I O N // P A R T N E R S H I P S // W H O

17. 17
01 | Homophily and social/emotional relevance
02 | Susceptibility and spontaneous adoption
03 | Geographic utility
04 | Relative disposability of income
R E C O M M E N D A T I O N // P A R T N E R S H I P S // W H Y
Audiophile targeting.
Why it could work.

18. 18R E C O M M E N D A T I O N // M A R K E T S K I M M I N G & P R O D U C T C H A N G E S
03
Market skimming.
Maximize revenue.
Skimming is the practice of charging the highest
price possible—the consumer’s willingness to pay—
and subsequently lowering prices to attract more
users.
04
Product changes.
Maximize user experience.
A premium service should feel premium. Increased
product management and a UI overhaul could
greatly augment the experience for TIDAL users.

19. 1. E X P E R I M E N T A L
2. I N F L U E N T I A L
3. P O T E N T I A L
4. T I D A L
19C O N C L U S I O N

20. C O N C L U S I O N // T H A N K Y O U
Q U E S T I O N S ?

21. 21A P P E N D I C E S

22. 22A P P E N D I C E S // A
1. TIDAL X
TIDAL X is a program that connects artists directly with fans by giving them a
platform to engage with them in unique ways, including one-of-a-kind live shows,
events, artist meet & greets, and concert tickets for TIDAL members to enjoy. With
TIDAL’s commitment to help artists interact with their fans in new ways—the
possibilities are endless for what we can offer fans. TIDAL X experiences will
showcase and support artists of all levels from established artists to emerging talent.
Fan interactions and geographic data from TIDAL enable TIDAL X events to be
targeted to offer compelling experiences for true fans. Examples include:
● The Fenty by Rihanna runway show in Paris was streamed live for
TIDAL members, a selection of whom were also granted access to
attend the exclusive event.
● Chance The Rapper’s Magnificent Coloring Day music festival was
streamed live, offering TIDAL members the chance to see
performances from artists such as Young Thug, Alicia Keys, and
Chance himself.
● Over 1,500 TIDAL members were invited to JAY Z and Beyoncé’s
10/15 and 10/20 charity concerts at the Barclays Center, where the two
stars performed alongside Ms. Lauryn Hill, Nicki Minaj, Common,
Usher, and countless other special guests.
● Over 500 TIDAL members were given the opportunity to attend Kanye
West’s Yeezy Season 3 and Season 4 fashion shows in New York.
Both events were also streamed live for TIDAL members around the
world.
● A TIDAL X show celebrating the 10th Anniversary of Rick Ross’ 2006
debut album Port of Miami opened its doors to 3000 TIDAL members,
the concert was also streamed live for all TIDAL members.
● DJ Mustard's TIDAL exclusive documentary "For Every 12 Hours" not
only immersed fans in the come-up and daily activities of the go-to
hitmaker, but brought select TIDAL members to a private screening
and Q&A in Los Angeles hosted by DJ Mustard.
● For the release of Usher's ‘Hard II Love’ album, TIDAL invited over 500
Usher streamers to an exclusive listening party in Los Angeles.
● At TIDAL X: Blood Orange, select Blood Orange fans were given free
tickets to his Los Angeles concert where he performed his most
beloved songs and his acclaimed 2016 album ‘Freetown Sound’ in its
entirety.
● In addition to being the exclusive home for the deluxe edition of Bon
Jovi's ‘This House is Not for Sale’, TIDAL hosted live and intimate
listening parties for over 1000 members in London, Toronto, New
Jersey and New York City, which we also livestreamed.
● For Demi Lovato and Nick Jonas’ co-headlining ‘Future Now Tour’,
TIDAL hosted ticket giveaways that supplied fans with over 500 tickets
to shows all over America.
2. TIDAL Rising
TIDAL Rising is a program dedicated to artists from around the globe
who have passionate fan bases and are ready to reach a wider
audience with their music.
On an ongoing basis TIDAL curates and features a select group of
artists across genres from around the world, with support from our artist
& label relations, editorial, marketing, promotions, public relations, and
social media teams, to introduce fans to vibrant and dynamic music
they may have otherwise missed.
TIDAL Rising artists can leverage the following benefits:
● Prominent Placement On TIDAL - Any album or single
release, video content piece, or playlist or editorial content
piece will be featured on the TIDAL front page and be
allotted a slot in the “What’s New” section, the most visited
placement area on TIDAL.
● Press Photos - Fully-funded and produced professional
photo shoot for artists to create incredible high-resolution
images.
● Public Relations Support - PR team will provide support to
ensure good rollout plans are in place for releases, and
will accompany artist to events if needed.
● Artist Imaging - Provide a professional stylist to help artist
with wardrobe, hair, and makeup, as well as other aspects
such as media training.
● Tour Support - This speaks to the core values of artists
supporting artists. The premise is simple: TIDAL’s Tour
Support is a fund for TIDAL Rising artists that never has to
be re-couped or paid back. This may include facilitation of
everything from van rentals to equipment rentals to fuel to
hotel and any other needs that may arise for the band on
the road.
● Music Videos - TIDAL can provide funding and help
connect artists with great and established music video
directors so that newer artists can create incredible and
professional music videos.
● Custom Editorial And Video Content - Video and editorial
features that allow fans to really get an in-depth look at an
artist and their musical persona.
● Live Show Bookings or Premium Show Placements -
Valuable opportunities to perform for tastemakers,
industry heavyweights, and fans.
TIDAL is a global music and entertainment platform that brings artists and fans
together through unique music and content experiences and is currently available in
52 countries.
TIDAL has over 54,3 million songs in our catalog and over 215,000 high quality
videos, offering passionate music fans both a premium and high fidelity sound
quality, along with high resolution video, and expertly curated editorial content.
TIDAL has the commitment of artist owners that believe in creating a more
sustainable model for the music industry. The TIDAL artist-owners are Alicia Keys,
Arcade Fire’s Win Butler and Regine Chassagne, Beyoncé, Calvin Harris, Coldplay’s
Chris Martin, Daft Punk, Damian Marley, deadmau5, Indochine, J. Cole, Jack White,
Jason Aldean, Shawn “JAY Z” Carter, Kanye West, Lil Wayne, Madonna, Nicki
Minaj, Rihanna, T.I. and Usher.

23. 23A P P E N D I C E S // B1
Despite an unprecedented increase in the demand for music over the past ten years, the
actual value of the recorded music industry has declined by 32% over that time span.
TIDAL believes in valuing music. We are committed to creating a sustainable model for
the future of the music industry, which includes maintaining value for music, respecting
creativity and encouraging the active participation of artists. A more sustainable and
equitable model for artists, producers and songwriters that includes paying more for
streaming, can help incentivize support for streaming and create new ways to ensure
music maintains its value . We support full transparency to better educate consumers and
stakeholders, and encourage all music industry stakeholders to embrace open
communication about the cost of their services.
Our artist-owners developed our model so that TIDAL pays the highest ratio of royalties
vs. revenues to music creators of any streaming service and equal rates are paid to
artists regardless of whether they're signed to a major label, an indie label, or not signed
to a label at all.
TIDAL believes in the value of music and the contributions of all artists. We provide the
highest compensation to artists and are consistent in our approach regardless of whether
an artist is on a major label or independent. While other services compensate
independent rights owners less than major labels, TIDAL pays all major and independent
labels and rights owners equally. TIDAL also does not pay the labels any fees that are
not disclosed.

24. 24A P P E N D I C E S // B2
As with other platforms, in some instances, what fans pay for include fees charged by third parties that are out of our control.
For example, when someone subscribes to TIDAL via the iPhone app, Apple charges a 30% administrative fee. Similar to other
apps, this is why TIDAL prices are higher within the app store ($12.99 and $25.99 if subscribed to in-app, versus the lower cost
of $9.99 and $19.99 if subscribed to via TIDAL.com.)
There are a number of variables that impact an artist's royalty payments, including the following:
● Location from which people are streaming an artist's music
● TIDAL's total number of paying subscribers
● Relative premium pricing and currency value in different countries
● An artist's royalty rate with his/her label
As seen in the chart above, the $9.99 Premium and $19.99 HiFi monthly subscription fees go toward paying royalties for master
recordings, copyrights and various other royalties, as well as to credit card payment fees and to fund operating expenses.
Operating expenses are paid from gross profit, including staff, office space, and content hosting costs.

25. 25A P P E N D I C E S // B3
1. Tidal Monthly Revenue
The total revenue TIDAL makes in a given month comes only from subscriptions. TIDAL does not generate revenue through advertising placement in its services. For TIDAL, artist royalties are calculated on the basis of all
revenues without exception.
2. Artist's TIDAL streams / Total TIDAL streams
This ratio calculates an artist's share of total listens, based on popularity. The result determines the percentage of our total pay outs that should be paid for that artist's music rights. Importantly, all streams on TIDAL are listened
to by paid subscribers; unlike other services, we do not have a free offering (allowing only for free trial periods), so the revenues paid to rights holders are not diluted by free streams and rights holders are compensated.
3. ~75% to master and publishing owners
TIDAL negotiates our royalty economics with the record labels and music publishers in each territory where we operate. Our current payment structure calls for us to pay out up to 75% of the service revenues to rights holders
(including both master recording rights holders as well as music publishers).
4. Artist's royalty rate
This is the end rate paid to the artist after the rights holder royalty split and any other deductions have been applied by the record labels and publishers.
Once TIDAL has paid a rights owner the total royalties due for their accumulated streams, that label or publisher pays each artist according to that artist's contractual royalty rates. For example, a label may have a deal in which
they retain 80% of all distribution fees and 20% goes to the artist.
Recoupment status may also impact the royalties artists receive from their respective labels and publishers (some labels cross collateralize streaming income against unrecouped recording costs balances).
Independent (unsigned) artists can retain up to 100% of their royalty payouts from TIDAL by using one of our aggregator partners (a small fee may be applied by such partners).

26. 26A P P E N D I C E S // B4
The chart shows average royalty payments for albums in terms of popularity (top 10, top 11-50 and
top 51-100) for 1 million subscribers:
The bars and $USD figures are the total royalties to be paid out to rights holders for albums for 1
million subscribers on TIDAL. The average monthly gross royalty payments for the top 10 album on
TIDAL are ~$52.5k, compared to ~$15.0k on average per album positioned between 11-50 in terms
of popularity, and ~$7.5k per albums for those between the top 51-100 places.
Even though we are currently generating millions of dollars in royalties for rights holders for the top
artists each year, we are just getting started and expect to earn artists and rights holders far more as
we grow our subscriber base.
HOW DOES TIDAL GENERATE REVENUES?
TIDAL generates revenues by charging users a subscription fee. TIDAL currently has 2 subscriptions
tiers (and a subscriber can try either with a 30-day free trial).
1. Premium for $9.99 / month
For $9.99 per month, TIDAL's Premium tier gives users unlimited music across multiple devices
including smartphones, computers and tablets, as well as access to exclusive TIDAL X events.
TIDAL Premium subscribers can also create playlists and download songs to their devices for offline
listening – all without intrusive advertisements.
2. HiFi for $19.99 / month
TIDAL's HiFi tier gives subscribers all the same great content and experiences as a Premium
subscription, except music is delivered in lossless, CD and MQA quality (1411 kbps vs. 320 kbps for
standard streaming).
HiFi streaming delivers an uncompressed sound file, which means that you can hear every
instrument and every note – as the artist intended. This tier costs $19.99 per month.
3. Discount program for students
TIDAL offers a special discount program for students, in order to provide access to both our tiers at
affordable prices. Student benefit from 50% discount on our subscription tiers.
4. Discount program for families
TIDAL offers a special discount program for families, in order to provide an affordable access to all
family members who want to enjoy their own favorite music. Each additional family member is offered
a 50% discount on both subscription tiers. The family package is limited to 5 members.
5. Discount program for US military
TIDAL offers a special discount program for owners of a military ID in the US. All eligible users will
benefit from 50% discount on both our subscription tiers.

27. 27A P P E N D I C E S // C

28. 28A P P E N D I C E S // D
● At the end of 2016 there were 132.6 million music subscribers, up from 76.8 million in 2015
● In Q4 2016 Spotify’s subscriber market share was 35% and it had $2,766 million in retail revenue
● Apple Music was second with 21 million subscribers at the end of 2016, a 15.6% market share and it had $912
million in retail revenue
● In 2016 Apple was the largest driver of digital music revenue across Apple Music and iTunes
● The US is the largest music subscription market, which Spotify leads with 38% subscriber market share
● The UK is Europe’s largest streaming market, which Spotify also leads
● China’s subscriber base is the second largest globally, but it ranks just 13th in revenue terms
● Japan is the world’s third largest subscription market, in which Amazon has the largest subscriber market share
● Brazil is Latin America’s largest music subscription market

29. 29
Have you ever used TIDAL? What did you think about it?
“Tidal is just like really exclusive, it only has mainstream artists.”
“I only use it to listen to like JAY Z and Beyonce.”
TIDAL offerings include exclusive content and lossless audio, did you experience any of them?
“The only thing TIDAL has going for it is like their exclusive content.”
“My headphones can’t tell the difference anyway—it’s a very niche group of people.”
What was your experience like with TIDAL?
“I’ve used TIDAL and its not as smooth as Spotify...the platform is kind of slow and it doesn’t seem as streamlined.”
“I wanted to look at all of the exclusive content but it’s too slow to be worth it.”
“They don’t care enough about the platform—it’s in need of UI/UX changes.”
What’s your go to platform for music streaming?
“Spotify.”
“Spotify has really good algorithms like discover weekly, Spotify radio... Spotify Radio is really awesome.”
“Soundcloud is for really underground artists, aspiring artists... anyone really to produce. Good way for people to find underground music.”
Can you compare TIDAL with the aforementioned platforms?
“Spotify has plenty of underground artists, podcasts, videos, and a huge variety of artists.”
“Spotify also seems to have a low barrier to entry, meaning creators can easily upload their songs and gain exposure.”
“Soundcloud gives listeners and creators a lot of freedom, like there’s no pressure on Soundcloud.”
A P P E N D I C E S // E

30. 30A P P E N D I C E S // F

31. A Quick Guide to Apple Music, Spotify, and More Top Music Streaming
Services. (2017, September 11). Retrieved April 17, 2018, from
http://fortune.com
About TIDAL. (n.d.). Retrieved April 17, 2018, from
http://support.tidal.com
About. (n.d.). Retrieved April 17, 2018, from http://press.spotify.com
Apple Music vs Spotify – which is better? (2016, December 2). Retrieved
April 17, 2018, from http://whathifi.com
Archives: Apple Music. Retrieved April 17, 2018, from
http://musicindustry.wordpress.com
Benefits To Artists + What Makes TIDAL Unique. (n.d.). Retrieved April
17, 2018, from http://support.tidal.com
Kahraman, E. (2017, September 13) How and why influencer marketing
works. Retrieved April 17, 2018, from http://dailysabah.com
Loren, T. (2016, September 22). How to Grow Your Business with
Instagram Influencer Marketing. Retrieved April 17, 2018, from
http://later.com
Newman, D. (2015, June 23). Love It Or Hate It: Influencer Marketing
Works. Retrieved April 17, 2018, from http://forbes.com
31R E F E R E N C E S
Pierucci, S. (2018, January 17). Why MICRO-INFLUENCER Marketing is ‘The
Game’ in 2018. Retrieved April 17, 2018, from http://medium.com
TIDAL – A NEW WAVE IN BRAND-BUILDING? (n.d.). Retrieved April 17, 2018,
from http://six-degrees.com
The Spotify Numbers You Won't Have Seen. (2018, March 23). Retrieved April 17,
2018, from http://musicindustry.wordpress.com
Wolfson, C. (2017, January 30). MACRO VS. MICRO INFLUENCERS. Retrieved
April 17, 2018 from http://revolutiondigital.com
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