If you can’t beat ’em, buy ’em. Apple is in discussions with Tidal about acquiring its music streaming app, which offers exclusives and early releases from big artists like Beyonce and Kanye West. The Wall Street Journal reports that the talks are still early and might not end in a deal, but Apple wants those exclusives to bolster its Apple Music streaming app that’s currently in hard-fought competition with Spotify.
Apple has been pushing to score exclusives of its own, like the release of Drake’s most recent album. But Tidal has been winning on that front. Rapper Jay Z bought Tidal for $56 million in March 2015, then revamped it with a set of landmark partnerships with some of the biggest names in music, including venture as co-owners: Alicia Keys, Calvin Harris, Arcade fire, Chris Martin from Coldplay, Beyonce, Daft Punk, Jack White, J. Cole, Jason Aldean, Kanye West, Deadmau5, Madonna, Nicki Minaj, Rihanna and Usher.
Apple sees music as a big part of the future of mobile, and as a way to encourage sales of its flagship iPhones. Even if it had to pay a steep price for Tidal, its exclusives could give it a big edge over Spotify, which has concentrated on listening features like Discover Weekly instead.
If Apple does buy Tidal, it could be good for listeners, who are facing a balkanized music catalog divided between the different streaming apps. To listen to the new Drake and the new Kanye, you’d need two almost entirely redundant $10 per month subscriptions. If Spotify gets serious about exclusives thanks to the hire of former Lady Gaga manager and tech investor Troy Carter, things could get even worse.
Apple Music now has 15 million paying subscribers, compared to Spotify’s 30 million paying subscribers and 100 million active listeners. While Apple Music has been growing fast, the company might want to buy Tidal to accelerate user acquisition of people who’ve never really used streaming services. That could be easier now than going it alone without Tidal and having to wrestle listeners away from Spotify later when they’ve become entrenched with playlists and personalization.
Apple is already criticized for using its ownership of the App Store and iOS operating system to hinder competition from Spotify. Apple owning Tidal would certainly give listeners fewer options. But if it puts the best new music all in one app, even loyal Spotify users might switch to a Tidal-powered Apple Music.