A report from The Wall Street Journal published on Thursday claimed that Apple is in early talks to acquire Tidal, the music streaming service owned by rapper Jay Z and a collection of his friends.
On the face of it, that seems like rather a strange deal. Apple already has its own music streaming service, Apple Music. And Tidal isn’t exactly a runaway success. Many of its subscribers come through deals with telecoms companies.
But there’s one big reason why Tidal could be an attractive prospect for Apple: The sheer amount of artists that are on board with the platform and giving it exclusives.
Here’s a photo from Tidal’s relaunch event in New York in March 2015.
Standing on stage are some of the biggest names in music, and that’s not even the full line-up of musicians who backed the company at launch. Many of them have published exclusive music to the service too. That’s a big draw for consumers: If they know that the new Kanye West album is going to be on Tidal first, then they will likely subscribe to that service instead of Apple Music or Spotify.
Of course, Apple has bought a music streaming service before. It acquired Beats, best known for its line of headphones, in 2014. But that deal also included the company’s music streaming platform, as well as key figures inside the company like dealmaker Jimmy Iovine, Nine Inch Nails frontman Trent Reznor, and rapper Dr. Dre.
If you want to know why Apple might acquire Tidal, then look at the reasons why it acquired Beats. Yes, there was the music streaming component, but far more valuable was the music industry expertise and contacts that came with hiring someone like Jimmy Iovine.
Last month a report claimed that Iovine is the driving force behind Apple’s music streaming service. He’s the behind-the-scenes dealmaker who has been helping bring in exclusives. And what other music streaming service is going all in on exclusives? Tidal.
Acquiring Jay Z’s startup may not bring with it a huge uptick in subscribers for Apple Music, but it would at least help Apple to secure more exclusives and build relations with more people in the music industry.