In 2014, Apple made a seemingly surprising purchase in Beats. The headphone brand was in slight competition with Apple's own headphones and the music service was a market disaster. In the 2 years since the purchase, Apple has mostly rebranded Beats Music to Apple Music and the headphone purchase will help them make the terrible transition from a regular headphone jack to their proprietary connection. It would seem that the company has what it needs to revitalize their music business.
With that said, it is once again a bit surprising to hear that Apple is in talks with another failed streaming service, Tidal, to join the Apple Music corral. It's clear why Tidal would be interested in this acquisition: they cannot seem to attract any customers to the service, despite having a number of exclusive tracks, albums and artists. But why would Apple be interested in purchasing a competitor to the failed service they already turned around?
For that answer, we examine Tidal's market value: exclusives. With a number of artists getting fed up with the way they were being treated by Spotify and Apple and signing exclusive deals with Tidal, purchasing Tidal would give Apple exclusive contracts with those artists instead. In the short-term, this would be good for Apple Music, as it would reintroduce a number of lost artists. In the long-term, however, Apple would need to make changes to retain them after their contracts are over.
If these artists left Apple because of mistreatment, you can imagine their reaction to having their contracts sold back to Apple. If nothing changed within the company itself, it would be likely those artists would jump ship once again, as soon as they were able. So, if Apple thinks this is going to be an easy, number-boosting move, they are sorely mistaken. They are going to have to work hard to maintain the artist-friendly focus that Tidal was known for within the industry.
Can they maintain those artists? Will they make the purchase? What do you think? Let us know in the comments.