Why Apple buying Tidal makes sense

Tidal's struggles could be Apple's gain

Tidal

Apple is reportedly in talks to buy Tidal, the music streaming service run by iconic rapper Jay Z.

Unnamed sources familiar with the matter tell the Wall Street Journal the talks are ongoing and may not result in a deal. A Tidal spokesperson denies the company is in talks with Apple.

But if discussions are taking place, why would Apple want to buy Tidal when it has its own Apple Music subscription service already? By all accounts, Apple Music isn't doing too badly for itself.

One obvious reason is for Tidal's technology. It's currently the only music subscription service that offers CD-quality "Hi-Fi" streaming for $19.99/£19.99/AU$23.99 a month.

Of Tidal's paltry 3 million subscribers, almost half of them pay for the Hi-Fi subscription, pointing to a passionate user base willing to chip in for better sound. Apple could tap into Tidal's audio tech to offer a higher tier for its own streaming service, charging more than its standard $9.99/£9.99/AU$11.99 monthly subscription for those willing to pay it.

Star power

Tech and higher subscription prices aren't all Apple has to gain. It also likely has its eye on Tidal for its exclusives and influence in the always-tricky music industry.

Jay Z successfully brought on big names like Rihanna and Kanye West to the service, scoring exclusive streaming rights to boot. Tidal even houses exclusive video content, like Daft Punk's Electroma film and The White Stripes' first TV appearance. Not surprisingly, Beyoncé's Lemonade was a Tidal exclusive, too.

For Apple, having big stars onboard means more influence over the music biz when it comes to rights. Apple Music has already nailed down its own exclusives, like Drake's Views album, but Tidal would bring even more offerings to the table.

The ability to tap artists would also be a huge boon for Apple as it looks to further its business as a lifestyle brand, not just a tech company.

For its part, while it's carved out a niche in the crowded streaming market, Tidal has struggled to gain traction. Though it's managed to bring on 3 million subscribers, executive shakeups and an industry dominated by the likes of Spotify, Pandora, Apple Music, and countless others have likely left it with few options but to look for an acquisition.

Today's rumor comes just a year after Apple launched its music streaming service, which counts around 15 million subscribers, roughly half of Spotify's numbers. Adding Tidal's members wouldn't boost Apple Music's users significantly, though exclusives would likely draw in more as time goes on.

At any rate, a potential Tidal buy certainly doesn't help Apple's case that it's not trying to snuff out competition. Oops.

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