Jay-Z may have written The Blueprint when it comes to hip-hop, but it looks like he might still have a way to go when it comes to tech. With the ever-rising popularity of music streaming (which increased by 54% in 2014 [Katie Marsal, Apple Inside, Jan. 2, 2015]) coupled with the steady decline in revenue from music sales, trying to get into the streaming game can look pretty lucrative. So, when Jay-Z acquired hi-fi music streaming service Tidal, gathered a team of the world’s biggest music stars as company spokespeople, and launched a multi-million dollar marketing campaign, Tidal seemed at first glance to be destined for success. However, little to the surprise of those who had followed the venture a bit more closely, Tidal’s re-launch earlier this year was a spectacular flop- a flop at this point, it seems, no amount of reputation management tools could fix. But if we look at what went wrong with Tidal’s strategy and launch, there are several takeaways that can be applied to conversation marketing in practically any industry.
Know Your Value
Just because you feel like something is valuable doesn’t mean consumers perceive the value. Exclusive video content, higher quality audio streaming, and higher royalty payouts may sound nice on paper, but if it’s not important to consumers it doesn’t matter how valuable you think it should be. Not only did Tidal drop out of the top 700 apps almost immediately after its release, it pushed both Spotify and Pandora higher up the download charts (Ryan Middleton, Music Times, Apr. 21, 2015). If anything, Tidal reaffirmed what consumers value in other streaming services- low price points and large music catalogs. Beats by Dre may have taught us that emphasis on sound quality isn’t entirely dead, but customers sure aren’t willing to pay $20 a month for it. Don’t focus on what you think is valuable. Focus on what your customers will think is valuable.
Consider How You Deliver Your Message
The truth is, there’s a valid point Jay-Z and others are trying to make about music streaming. In all likelihood, artists deserve to earn more from recorded music. Being a professional musician is a notoriously difficult profession, and the shift from CDs to digital downloads to streaming has done little to make a career in music more lucrative for performers. But the real misstep for Tidal wasn’t so much what the message was, but how that message was communicated. Having a stage full of the world’s wealthiest musicians complaining about not making enough money is out of touch with reality at best, offensive and insulting at worst. There is something to be said for musicians in a position of influence speaking up for the “little guys,” but if the public has to dissect the nuances of your language in order to understand the full value, you failed before you ever started. It also didn’t help how self righteous the first promo videos looked. Whether it’s who you have speaking for you, where you post your press release, or on which social media platform to focus your efforts, never underestimate the vehicle you use in the effectiveness of your message.
Give Consumers a Reason to Convert
Consumers won’t make the switch unless you give them a very good reason to, no matter the industry. With a significantly smaller library of artists, no free version, and a pricing model that is far more expensive than Spotify, most music consumers can’t find a reason to justify switching services. What Tidal seemingly failed to realize is that you can’t introduce a product that is equally as good as something that already exists. Hell, you can’t even introduce a product that’s a little better than what’s already out there. In order to convince somebody to switch over from something they are already satisfied with, you have to show them something that is notably and indisputably better than the current alternatives. If your product can’t make giant strides in quality at the same price as competitors or deliver the same quality for a significantly lower price, it’s unlikely that you’ll ever be able to take away enough market share from competitors to last.
Jay-Z refuted on Twitter that Tidal is “here for the long haul,” despite having already closed some offices and replaced their CEO in April. That may be, but most companies don’t get a second chance at branding themselves once the damage is done. No doubt there will be a wave of social media branding, reputation management tools, and content amplification, but if Tidal can’t figure out a way to shift momentum in a significant way it looks like it will never be more than a failed vanity project.