US mobile network operator Sprint has decided to purchase 33% of music streaming service Tidal for an estimated $200 million – a deal we can see little sense in considering Tidal is a company which saw net losses of $28 million in 2015.
To say that Tidal will be swamped by Spotify and Apple Music is probably an understatement. It can be accessed in 52 countries, but is intrinsically an offering that will fail to exist outside of the US – hampered by a mock-up of celebrities preaching under the pretense that Tidal benefits budding artists, while in reality making rich artists richer.
This looks like another attempt by fourth-placed carrier Sprint to slow the momentum of T-Mobile US in third, which offers Music Freedom as part of its Binge On service, allowing users to stream music from all the major players without being hit with overage charges – including Tidal, Spotify, Apple Music, Pandora, Napster, SoundCloud, Amazon Music, iHeartRadio, Google Play Music, and a host more.
This is the type of strategy that has contributed to the impressive growth of T-Mobile US, whereas Sprint is heading in the wrong direction with Tidal – its refusal to add a free, ad-supported streaming tier is a fitting example of where Tidal has positioned itself in the market.
The third quarter of 2016 saw T-Mobile US add almost 2 million net mobile connections in Q3 2016 – claiming it did so by ransacking 300,000 subscribers from Sprint in the quarter, as well as 400,000 from AT&T and 250,000 from Verizon. Meanwhile Sprint recorded net additions of 740,000 subscribers in Q3.
Sprint’s subscriber base will be able to exclusively access content that is not available to Tidal subscribers not tied to Sprint – a move that is likely to disgruntle Tidal’s niche fan club.
Tidal started out life by only offering an ambitiously over-priced subscription costing $20 month, but it soon saw the error of its ways and added a $9.99 tier – the de facto price point for music streaming services. The deal will see Sprint CEO Marcelo Claure take a seat on Tidal’s Board of Directors.
Rapper Jay Z, co-owner of Tidal, said: “Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential. Marcelo understood our goal right away and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience.”
Fans of Canadian indie rock outfit Arcade Fire may be aware that new track ‘I Give You Power’ was released exclusively on Tidal last week, but was then released on all streaming services shortly after. Arcade Fire frontman Win Butler played his part in the birthing of Tidal, and has been openly critical about the poorly mistimed launch.