Tidal Now Has 3 Million Subscribers And Its Growth Strategy Might Be Working

Look out, Rhapsody. Watch out, Deezer. Buckle your seatbelt, Apple. On its first anniversary, Tidal said it has 3 million paying subscribers, 45 percent of whom are paying $20 per month for the streaming music service’s premium tier.

While that total is far behind Spotify’s 30 million or Apple Music’s reported 11 million paying subscribers, it’s a massive accomplishment for a service that a number of music executives put on death watch last year.

To say that Tidal took its lumps in 2015 would be putting it mildly. In addition to a rollout that rubbed a lot of fans the wrong way, the company cycled through three CEOs and lost its chief investment officer and a number of other executives. It was named in a lawsuit for failing to pay royalties, though it quickly shot back that the plaintiffs’ issue was with a third party.

Those misfires certainly attracted a lot of ink. But over the same 12-month stretch, there were plenty of signs that Tidal was doing something right. The company used the deluxe “HiFi” tier of its service, which delivered lossless, studio-quality audio for $20 per month (Tidal’s basic tier costs $10 per month) to sign more than 50 partnerships with high-end audio products.

Tidal also managed very quickly to become a major event promoter. The company mounted and streamed more than 40 live concerts last year, and more than a few of them, like Tidal X: 1020 and Kanye West's premiere of Yeezy Season 3, attracted record-setting audiences around the world.

And most important, the company's controversial exclusivity strategy, which had its high-powered owners debuting their releases exclusively on Tidal for a period, appears to have borne fruit. Rihanna's "Anti," which leaked a few hours early, was streamed more than 13 million times within 12 hours of its release. Kanye West’s “The Life of Pablo,” an album that West is reportedly still working on, was streamed more than 250 million times within 10 days of its release on the service. Further exclusives are reportedly in the pipes.

More than anything, it seems to be the public's hunger for those albums that compelled people to sign up for trials. After Jay Z announced Tidal had 770,000 subscribers last April, it took another five months to get to 1 million. That leap from 1 million to 3 million can partly be pegged to consumers' embrace of streaming. But "Anti" and "Pablo" deserve a lot of credit too.

What will be interesting to see is whether those customers feel compelled to stay. These services deal with a substantial amount of churn, and it is not a given that the people who are currently on their trials will stick around. But all Jay Z and his co-owners wanted was for people to give his service a chance, and it appears that they are.

“That opinion came before we even explained what it was,” Jay Z told NYU professor Errol Kolosine last April during a conversation about Tidal's rocky rollout. "’This thing is horrible! … What is it? You know?”