Tidal CEO Richard Sanders Visits WPU
On February 27, 2018 Tidal CEO Richard Sanders visited William Paterson University’s Music Management Seminar Series. Below are key notes from his discussion with Professor Steve Leeds.
“We don’t feel there’s any service that takes care of customers the way we do.”
Tidal streamed almost 40 shows in 2017. “Lots of festivals.” These are exclusive, in 4K video, high fidelity.
Challenge of taking a live event and turning it into a VOD event. Chris Brown record release party; cultural events. “Why not expose you to more than you’re already aware of.”
Tidal playlists are based upon their curators vs. Spotify, which can be based upon our listening habits. Tidal wants you to hear more and different music.
“When you hear music in full fidelity, it’s a completely different listening experience.” Sanders on the high quality streams of Tidal. Go to the MQA section, “there’s only about 4,000 records there, but that is the purest form.” Can’t do it through Bluetooth because that creates a loss in fidelity. 50% in Europe/25% in U.S. subscribe to Tidal in high fidelity.
Neil Young gave Tidal the Pono catalog “because he appreciates high” quality. Pono was Young’s high fidelity streaming service that he shuttered. See HERE why.
“There’s a never-ending update to what we have to do.” Every time a carrier updates their operating system, Tidal has to make sure their platform is compatible. Add in Echo, Alexa, different manufacturers, different countries… Tidal is $12.99 through the app store and $9.99 directly through Tidal to subscribe. When you compare services, the have similar interfaces, similar catalogs, etc. “9 times out of 10,” the consumer will choose Apple because it’s $9.99. With Tidal, it’s $19.99 and $24.99 through the app store. 50% discount for students and active military.
‘The challenge for us in growing subscribers is I don’t have the same wide distribution network as our competitors.” Amazon’s streaming service is behind Echo and an installed base of 100+ million Prime members. Apple has customer information through phones, watches, retail. Spotify has freemium offering used by millions, a base of which that is “a frictionless environment” to market to.
For Tidal, a consumer needs to put down a credit card in order to get the free trial, which many consumers don’t want to do. To compensate, they partner with brands; telco bundles, liquor companies, auto companies.
Their Sprint partnership has been fruitful – they received an infusion of capital to help update the service and improve it. The were able to “expand the creative team,” which is human capital. He calls all of the deals available on the retail level with a company like Sprint can be difficult because there are so many different deals that change frequently and many of the people at the retail level are part-time.
They were the first streaming service to give credit to songwriters. They give as many credits as are available for songs. “I’m hoping within six months all those credits will be live.”
Sanders’ job today is to help shape the company in the consumer’s mind that it’s a company built around high fidelity. Let’s get away from the celebrity owners and focus on the name Tidal and the quality of the music. “What’s the message? What’s the call to action?” He thinks these things should be clear and “if you go to Tidal.com today, you’re not going to see” clarity in those two elements. He wants to fix that.
Net Neutrality – Music streaming doesn’t take up as much bandwidth as with the streaming video companies. He doesn’t think their volume at this point will make this a problem.
“Managing people is about building trust and relationships. Creating a supportive environment.” Tidal is only 3 1/2 years old. “It’s really a brand new company.” When he was hired, he knew people in the company were concerned. What did this mean for the company and their jobs? He listened.
Why several CEOs since the company started? “When you have celebrity ownership, we’re viewed under a different lens.” Nobody cares about what Daniel Ek or Tim Cook says. They DO care about what Jay-Z and Beyoncé say or do. So the media has focused on the CEO changes.
CEO #1 took his buyout when he sold the company.
CEO #2 was an interim CEO because new ownership had no idea how to run a streaming company. Plus, the guy and company were from Norway.
Jeff, CEO #3, was more of a tech, subscription-based CEO. He didn’t understand the creative process and communicating with artists. “When your board consists of 16 artists, I think you need to know how to communicate.” They wanted to find someone who understood contact and could help create it. “And that’s why I was approached. We’ll see if I last or I don’t. We’ll find out.”
He tries to listen to the consumer and the artist. “We’re always going to be there to support their vision to them.”
Tidal will “always be the market leader” when it comes to paying out royalties. Very thin margin; 70% of their revenue goes to the content owners. They have hundreds of licenses with labels and performance rights organizations around the world that are constantly being negotiated.
Does he miss working for a record company? He says no. He feels the connection between artist and label twenty years ago isn’t as present today. He feels that a company like Tidal can create a newer level of artist development “that’s really exciting again.”
His biggest mistake. He was the president of V2 Records. Was told Moby was available and he could have signed him. Richard said he wasn’t going to sign Moby; he just didn’t like the music. The friend pushed him to sign Moby but Richard kept saying no. An A&R person heard a Moby song and convinced Richard to listen. His life lesson: Since then, “I’ve never passed on anything without listening.” Moby went on to sell 8 million records for V2.
Advice for someone who wants to get into the business. “The rules have changed. You used to have to beg for an A&R executive” to hear you. “Literally, the doors to the golden chamber were closed.” Today, a label isn’t needed. “My advice today: Just go do it. Put your music into whatever aggregator you want.” Focus on awareness. “If that artist isn’t generating an audience, get the hell out.” Find a new job, or a new act, if you’re pushing and pushing and not seeing any traction with streaming and socials.
A question was asked about giving more added value, such as merch. The revenue model is limited in that for Tidal, so they do more experiential added value rewards. Tickets, Rihanna’s sunglasses, Chris Brown’s listening party – “We look to try to create these experiences that” have value. He can’t offer things that “kill my bottom line” with subscribers.
“Three of the richest companies in the world are my primary competitors.” He means Apple, Google and Amazon. Plus, Spotify is worth $20 billion. The capital his competitors have compared to what he can do is vastly different. He considers Tidal a small upstart, a disruptor.
And that’s all she wrote. Well, all he wrote. I’m a guy.
To read about Tom Silverman’s visit from February 13th, click HERE.
For full details about the Music & Entertainment Industries Program, including courses, the minor, and our MBA, click HERE.
For full details about the WPU Pop Music Studies Program, including courses and audition requirements, click HERE.
Professor David Philp is Assistant Professor Music Management & Popular Music Studies at William Paterson University. He is the co-host of the only FREE advice college radio-based music & entertainment industry talk show in America, Music Biz 101 & More, which airs live most Wednesday nights and is available as a podcast HERE every night (days too). Your favorite professor is also co-author (with Dr. Steve Marcone) of Managing Your Band: 6th Edition. Reach him at PhilpD@wpunj.edu or find him on LinkedIn HERE.