After its widely covered, star-studded, and much maligned media event at the end of March, Jay Z’s music streaming company Tidal is gearing up to take on well-funded rivals like Google’s music offering Google Play, Spotify and Apple’s Beats.
Tidal hopes to attract users by releasing exclusive music on its platform, as well as high-quality sound; a service offering fans offline events like private concerts; a feature highlighting independent artists; and a service that will let artists upload their own music onto the platform.
But Tidal’s birth has so far been rough. It’s re-launch event was widely criticized and the app has since plunged on the App Store charts.
The Wall Street Journal spoke with Peter Tonstad, 43, who has been appointed interim CEO, replacing Andy Chen who left the company earlier in April. This is not Mr. Tonstad’s first stint at Tidal. He’s previously served as CFO, CCO and CEO at Aspiro, the Swedish-based parent company of Tidal, which Jay Z bought in March.
Here is an edited transcript of the interview.
WJSD: What’s your view on making music available for free, like Spotify does?
PT: Freemium is slowing down streaming in terms of getting paying subscribers –this needs to change for the future. The whole industry is shifting toward the strategy we have always believed in: that streaming services should be premium subscription models rather than giving away stuff.
WJSD: Why should a customer switch from other streaming services to Tidal?
PT: The reason is our exclusive content, and that we have a whole spectrum, from up-and-coming artists to the very established. It’s going to be the content richness, deep-diving into individual artists. It’s going to be a combination of content and artist engagement that we put on the platform, or that the artists publish themselves.
WJSD: The Tidal media event got extensive coverage, but it also met with a lot of skepticism and criticism. What are your thoughts on the event and how it was received?
PT: I was there; I thought it was absolutely fantastic. I thought it was extremely large of these global, well-known artists to step forward and say, “We need to change the model.” I don’t think they were thinking about themselves. I think they were thinking about the industry, about small, up-and-coming artists, about producers, everyone in the background who contributed to this music going live and getting into the market. Because the current model turns out to be unsustainable for new artists who don’t have distribution, or who don’t have any historical revenue streams to live on.
WJSD: Can you talk more about Discovery, where artists can upload their own music?
PT: You will within a few days through our Web site get very easy access to upload your content. When you upload, we manage everything: settlement, reporting and outpayments.
WJSD: How will the fee structure work?
PT: We pay rights holders a portion of gross revenues multiplied by their market share on the service. Once we account to the owner of the content, they would then account to their artists pursuant to their deals, which we are not privy too.
WSJD: How will copyright work?
PT: Uploaded material will be monitored daily by us, and partners we have engaged, in the same manner we verify the copyright for all owners. Users who upload will go through the same verification process and they are responsible for obtaining consent from the owners of the original material. The users or artists would register under their own name, with company ID and full address; they must accept our terms and conditions, in which they must warrant that they are the rightful owner or authorized distributor of the material, and that no third-party rights are being violated. We will monitor compliance. In the event of a violation, we will notify the user or owner and take down the material in question until the matter is resolved.
WJSD: Much has been made of Tidal’s audio quality. But is this still a selling point today when many listen to music through headphones on mobile devices?
PT: All artists in general care about sound quality. We offer a $9.99 monthly premium tier with good sound quality, and a $19.99 tier with very good sound quality, and people can choose.
WJSD: You’re facing well-funded rivals with big pockets. What’s the plan now?
PT: We will launch Tidal in even more markets, we will be marketing Tidal, we will be adding all the artists’ exclusive content and growing the organization. [Wall Street Journal]
