Why Would Apple Music Buy Tidal?

The Wall Street Journal is reporting that Apple is in talks to buy Tidal, the streaming music service purchased just over a year ago by Jay Z. Tidal claims to have 4.2 million subscribers, compared to Apple Music’s 15 million. (For comparison, Spotify claims 30 million paid subscribers.)

It has been common knowledge that Tidal has been up for sale since shortly after it was purchased. After some key executives bailed, and Mr. Z filed a lawsuit against Aspire, the company he purchased the service from, for inflating subscriber numbers, it seemed obvious that this purchase was a mistake.

But why would Apple buy Tidal? Certainly not, as some articles claim, for “its technology.” Tidal offers a lossless streaming option, and some journalists see this is some sort of magical technology that Apple wouldn’t be able to match on its own. Actually, Apple stores all its iTunes Store and Apple Music music in a lossless format (and much of it in high-resolution), so adding lossless streaming would be as simple as writing a few lines of code.

No, Apple would buy Tidal for two reasons. The first is the musicians who own the company. Apple, with its massive cash reserve, could make them an offer they would not be able to refuse, and therefore “acquire” a number of artists who could release music exclusively (at first) on Apple Music. The second is to get a competitor out of the game. While Tidal claims 4.2 million subscribers, this number is unlikely. Tidal is available in only 52 countries, much less than Apple Music, or even Spotify, and it would be surprising that they have grown so quickly.

Nevertheless, if Apple were to buy Tidal, they would certainly shut down the service (or slowly roll it into Apple Music). I would be surprised if they kept it going with its lossless option, though Apple will most likely offer a lossless streaming option of its own in the near future. Not that most listeners need it; it’s just that some may think it sounds better.