Beyonce performs onstage during the Pepsi Super Bowl 50 Halftime Show at Levi's Stadium on February 7, 2016 in Santa Clara, California.
Photo by Matt Cowan—Getty Images
By Mathew Ingram
April 26, 2016

It may be insensitive to think about things like record sales and licensing revenue in the wake of someone’s death. But there’s no question that the loss of an artist as popular as Prince has had a huge ripple effect on the music industry—especially Tidal, the only service where his work can legally be streamed.

Within days of Prince’s death, another major event took place that also boosted demand for Tidal. Namely, the release of a new album and video project from Beyoncé called Lemonade. But as beneficial as both of those things have been for the service, will they be enough to make it a long-term success? Probably not.

At the moment, Tidal’s big competitive advantage when it comes to other services such as Spotify and Apple Music is that Tidal is owned and operated by artists and musicians like Jay Z (who happens to be married to Beyoncé, and may or may not be the subject of her new album). That means access to exclusive releases like Lemonade, and the recent album from Kanye West, which was also an exclusive, albeit briefly.

The Kanye West example helps point out one of Tidal’s flaws, which is that the pressure on artists to make their music available through other services is almost overwhelming, and that makes the promise of exclusives a lot less believable.

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As the hype behind his new release The Life of Pablo was building, West promised his fans that his album would never, ever be available on other services like Apple Music. That likely helped generate a lot of new signups for Tidal (the service hasn’t released any new numbers since the launch), but those new members quickly found out that an exclusive isn’t always what it seems.

Tidal now faces a potential class-action lawsuit launched by a customer who paid for a membership based on West’s promises, only to find out within a matter of days after the album’s release that it would also be available on Spotify and every other streaming service. “Even if their streaming service is struggling, they can’t trick millions of people into paying money just to boost valuation numbers,” the plaintiff’s lawyer told Pitchfork.

There’s no reason to think that Beyoncé is going to do the same thing West did, especially because her husband and business partner is one of the co-owners of Tidal. According to both Tidal and Beyoncé, the new album will only ever be available for streaming on the service, although it is available for download on iTunes and Amazon.

But what about the next release from some other musician or artist that Tidal claims is exclusive? Unless that artist is as connected to Tidal from a business point of view as Beyoncé is, what’s to stop them from pulling a Kanye West?

Not surprisingly, Spotify takes a dim view of exclusives like the one that Beyoncé has promised for Lemonade. The company said in a statement following the album’s release that “long-term exclusives are bad for artists and they’re bad for fans.” While the streaming service is clearly conflicted because it competes with Tidal, at least part of its argument makes sense.

Apple Music reportedly has 10 million subscribers. Watch:

If you’re a musician—even a relatively famous one—you ideally want your music to be available through as many different outlets as possible, not just because it will increase the amount of licensing and download revenue you can get, but because it increases your visibility. That translates into other benefits and even potential partnerships or business opportunities, and it appeals to a musician’s ego as well.

What can Tidal offer in return? It can promise a larger payout. But that, in turn, puts pressure on the company’s finances, and Tidal is probably already suffering enough on that side of the business. Even Spotify—which is by far the largest streaming service in terms of paying subscribers with about 30 million—can’t seem to make money, and smaller services like Pandora are under even more financial pressure.

So while exclusives from artists like Beyoncé are enough to give Tidal a boost, they probably aren’t going to make the difference between success and failure because there simply won’t be enough of them. That poses a very real existential problem for the music service as it tries to survive in a chaotic marketplace for music.

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