So far, hefty prices, combined with celullar networks that struggle to stream bigger files on anything but a near-perfect connection and a lack of interest from younger consumers, has kept high-resolution audio from finding a larger audience. But as 5G nears, and companies like Amazon enter the market — sources say Spotify is looking into high-resolution as well — hi-res audio services could soon become a part of the ecosystem.
First, that means educating consumers. "We ended up with a generation of people who never heard audio other than MP3, and they just don't know," says Mackta. "Our marketing is an educational process to let fans know there is something better out there."
The lack of knowledge around the specifics of hi-res audio is evident, according to MusicWatch managing partner Russ Crupnick, but that doesn't mean people aren't interested in improved audio quality. According to a MusicWatch survey, 28% of internet users say sound quality is important, that it's not good enough on mobile devices and that they would be willing to pay more for better quality.
Even before the arrival of 5G, high-resolution audio services are growing across the board. Deezer says it has increased its Hi-Fi users 41% year over year, and nearly 40% of its Hi-Fi users listen to more than 5.5 hours of music per week. Thomas Steffens, CEO of classical music streaming service Primephonic — which offers a standard streaming option for $7.99 and a hi-res option for $14.99 (the same prices as Amazon) — says nearly half of its users opt for the higher-quality audio. "We see 40% of our subscribers choosing the more expensive, hi-res quality," Steffens tells Billboard, adding, "Classical fans are on average older, and older people care more about audio quality than younger people do."
"We're seeing two trends converging," says Tidal COO Lior Tibon. "On one side is 5G, and on the other is the development of streaming technology and formats that will allow us to transmit better files more efficiently."
Price — and marketing — also will be major factors. Tidal and Deezer charge $20 a month for their high-resolution tiers. But with Amazon matching Primephonic's pricing at $15 a month — and including 24-bit audio for the same price (Qobuz charges $25 a month for its 24-bit tier) — competing services may have to rethink how much they're charging users if they want to fully capture a potential audience that MusicWatch says could reach 65 million people in the United States.
The hi-res market could grow alongside 5G — but major players like Apple Music, YouTube and Spotify are still on the sidelines, and the mass market needs to be convinced it's worth it. "If there is something better, people are going to want it," says Mackta. "We've got to prove that it's better."
This article originally appeared in the Sept. 28 issue of Billboard.