If you came within a five-mile radius of a WiFi signal Monday, you probably heard about the launch of Tidal, the new music streaming service and Jay-Z’s newest project. Artists turned over their social profiles in anticipation and support, and millions watched the livestream of the big unveiling.Analysis abounds on what this means for the music industry and artists (just Google “Taylor Swift + Tidal” and you’ll see what I mean), but what is the impact on advertisers?
It’s tempting to say “it’s ad-free, so there won’t be one,” but if Tidal wants to survive long term after this initial publicity blitz, it will have to embrace some form of a brand integration strategy. There is room for unique premium branded content plays – not ads per se – but videos, behind the scenes shows… exclusive, engaging content. An off-the-cuff example is Red Bull – I can easily see them pairing up with Tidal for their music integrations or death defying stunts.
Once Tidal embraces brand integrations, we start talking about competition – digital radio is growing and it is sought after environments for brands. It’s effective in longer storytelling and targetable for local, among other things. Another player in the mix will most likely increase audience fragmentation to a certain degree, but ultimately it is also another environment for brands to play with… assuming enough consumers jump onboard to make it worthwhile.
At the end of the day, consumers are value conscious. Yes, most music enthusiasts do want to support their favorite artists (and Tidal’s differentiating factor, aside from superior sound quality, is that it’s the “musician’s streaming service”), but a desire to support artists has yet to be proven to be enough for adoption (especially when subscription price point is fairly high). And in turn, brands follow consumer behavior, so Tidal needs to figure out what its audience is – most likely it will be affluent, 30s-40s – users who want premium content and are willing to pay more for the allure of Jay-Z’s affiliation.
We’re in the earliest stages of Tidal’s launch, so I’m guessing we’ll learn much more in the coming days, but in my opinion, the new kid on the block has some work to do to entice consumers and brands to catch the wave.