Jay Z, Beyoncé, and Win Butler of Arcade Fire at the Tidal launch event in New York City in March 2015.
Photograph by Kevin Mazur— Getty Images for Roc Nation
By Dan Reilly
March 31, 2015

The fanfare surrounding Jay Z’s $56 million acquisition of high-fidelity streaming music service Tidal reached its apex on Monday when the rapper, his pop star wife Beyoncé, rapper Kanye West, rocker Jack White, and a number of other high-profile recording artists held a press conference in New York City to introduce the new company to an American audience.

Tidal positions itself as a high-fidelity audio service that streamed music encoded in the the FLAC format, which stands for Free Lossless Audio Codec. It plans to charge listeners $9.99 per month for music streamed at a resolution of 160 kilobytes per second—a middling quality on par with the average MP3—and $19.99 per month for its hi-fi counterpart. In comparison, Spotify charges nothing for 160 kbps music and $9.99 per month for 320 kbps, a higher but still “lossy” resolution. (Lossy is the term used to describe compressed audio files that have lost information on their way to a smaller file size. Lossless files retain such data.)

Tidal bills itself as “the first-ever artist-owned global music and entertainment platform” and promised to offer subscribers exclusive content. At the event, co-owner Alicia Keys and Tidal executive Vania Schlogel outlined a business model intended to benefit artists, a response to building criticism that the economics of Spotify and similar services do not make sense for the artists in question. Last year, pop star Taylor Swift removed her music from Spotify in protest of its small payouts; all but her latest album, 1989, is available to stream on Tidal.

But the event was big on pomp and small on details. At the event, executives and artists offered little insight into Tidal’s royalty rates and few reasons why consumers would abandon existing services to adopt Tidal’s. (One feature stood out: An “offline mode” that would allow listeners to stream music without wireless service, a boon to the straphangers in the audience. Still, Spotify offers the same feature for its premium subscribers.)

Which leaves the audio itself. The lacking availability of higher-quality sound has long irritated recording artists who spend months fine-tuning a record only to see it crudely reduced to its constituent parts and piped through $15 earbuds; rocker Neil Young introduced his Pono player for this reason.

But it is contested whether most listeners care enough to pay extra for audio beyond “good enough,” let alone whether their ears can discern between the lossy MP3 and lossless FLAC formats. (Experts often recommend that consumers instead spend their money on higher-quality speakers, receivers, or headphones.)

To Tidal’s credit, potential subscribers can take a test where they can hear standard and hi-fi versions of five different songs and select which version they think is better. If users get all five right, they will get a 14-day trial membership.

But until Tidal reveals more information about its royalty rates—or delivers must-have exclusives to distinguish itself from the pack—the company is solely banking on its star power to sell subscriptions. It’s not a bad strategy; just ask Beats co-founders Jimmy Iovine and Dr. Dre. One big difference, though: It’s a little difficult to conspicuously wrap an audio file around your head.

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