That said, one title has already disappeared from Spotify. Jay Z's first album, Reasonable Doubt, was pulled from Spotify on April 7 (only in the United States). The album's revocation could be as much a political statement as a business decision. A source close to his label says that Jay Z wants to make sure his content is available on paid services. "The Spotify thing is more about not giving him the choice," says the source, referring to Spotify's long-standing insistence on making all of its licensed music available to both paying and free users.
Artists with greater flexibility have already released exclusives with Tidal. Through her Westbury Road Entertainment imprint, Rihanna has already released two exclusive tracks, "Bitch Better Have My Money" and "American Oxygen," exclusively through Tidal. Madonna, two albums into a three-album licensing deal with Interscope Records via her Boy Toy, Inc. production company, has premiered a teaser for an upcoming video for "Ghosttown." Jack White, who licenses his music to Columbia Records via his own Third Man Records, has offered old White Stripes videos. Non-music exclusives have been popping up, too, such as a 50-minute Western from Erykah Badu and Daft Punk's 2007 film Electroma.
But avoiding competing subscription services will be easier said than done. Those competitors would inevitably confront the labels with whom they have licensing contracts if Tidal was made the exclusive home to any of that catalog, or new releases from those labels. "What am I giving you 70 cents on a dollar for if you're not providing the same value?" asks a subscription service executive. Without streams at competing services, the performance of singles by Tidal artist-shareholders' on charts that incorporate streaming, such as the Hot 100, would be hampered.
Competing services have leverage that could limit the amount of Tidal's exclusives; Apple could very well demand that certain music be available at both its download store and upcoming subscription service. It could refuse to give streaming holdouts their usual prime placement within the iTunes download store. Moreover, existing services have built-in audiences that Tidal's artist-shareholders might find hard to ignore. "I don't think [those artist-shareholders] want to walk away from a bunch of money," says a source at a competing service.
It's undeniable the artist-shareholders have an incentive to walk away from assured royalties from competing services, at least in the short term. The 16 artist-shareholders are being paid for their involvement, and presumably their exclusive content, with equity. With each artist holding three percent of Tidal, and the company having been acquired for $56 million -- it is almost certainly worth much more today -- each share is valued at $1.68 million. Turning that equity into actual money, however, is the real trick here. Artists can either sell their shares or cash out when Tidal is acquired. Success is necessary for both.
That's not to say Tidal artist-shareholders have only a profit motive. Many artists have been expressing discontent with the freemium model employed by Spotify, although the loudest among those detractors -- Taylor Swift, Thom Yorke, David Byrne -- are not currently involved with Tidal. The boldest statement has come from Tidal's artist-shareholder in the country genre, Jason Aldean, who in November pulled his catalog from Spotify and curtailed use of his music in user-generated videos on YouTube.
Regardless of exclusive content, Tidal's high-profile launch has probably made a positive impact. Media coverage from traditional news outlets to The Today Show helped drive a 15-times increase in U.S.-based searches for "tidal" via Google, according to Google Trends. Tidal's advertising spend -- including local billboards and television advertisements -- should further raise consumer awareness.
Competing services could also benefit. An executive at a competing service says he wishes Tidal the best of luck. "I'm rooting for them for the sidelines. A rising tide lifts all boats."