Tidal CEO explains why people will pay more for high-quality music streaming (interview)

This past week the U.S. got its first lossless music streaming service in Aspiro-owned Tidal, which claims to be the only one to offer the same quality of sound as you’d find on a CD.

The downside to this is that at $20 per month, it costs roughly twice as much as premium services from Rdio and Spotify. On top of that, many people don’t have high enough quality speakers to take advantage of the better quality audio Tidal is offering.

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However, Tidal CEO Andy Chen thinks there are enough people willing to spend a bit more for superior sound, especially for those that are already willing to spend top-dollar on incredible speakers (both headphones and home audio systems). VentureBeat asked Chen five questions about his service (below), and while there’s a business opportunity for lossless music streaming.

VentureBeat: How is TIDAL’s new service superior to the high-quality streaming music service launched by Deezer last month?

Tidal CEO Andy Chen: We’re the only service that offers the convenience of streaming music with the quality of high fidelity audio that is available on a wide selection of devices including iOS and Android, as well as audio equipment. We’ve already secured integrations with over 30 high end audio products including Bluesound, Harman, Denon Heos, McKintosh, Dan D’Agostino and many more.

VB: With the higher than usual monthly price, what makes Tidal confident that people — even sound quality snobs — will be willing to pay up?

Chen: Our experience from the past year is that more and more people are focusing on what is the best experience they can have rather than just settling for a generic experience when it comes to music enjoyment. We have already seen a tremendous amount of demand in the US based on our pre-registration process. Quality and convenience are worth paying for. We’re offering both, plus HD music videos and premium curated editorial content.

VB: As for the playlists/recommendations, who is putting these together and what’s the methodology behind it? How many people does Tidal employ? Music curators/editors?

Chen: Our experienced team of music journalists counts 10-15 globally, and we will also be working with a growing list of guest editors and media partners. Editorial features include album spotlights and daily updated features, artist interviews, daily news articles, playlists and close-ups on artists, labels, sub-genres and historical eras. Weekly playlists also present highlights from the week’s new releases and top recommended tracks.

VB: Tidal is partnering with quite a few high-end speaker companies, but does Tidal feel any obligation to help educate listeners on the best quality products to get the most out of the monthly service?

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Chen: Tidal will absolutely play a role advancing the awareness of quality sound and music streaming service. It’s less about a formal education program but more about expediting the evolution of music entertainment standards as well as the expectations of what those standards should be. We are currently developing various tailored marketing initiatives with our partners to further promote the awareness of how music listening should be. We will inform our users about the products available and how to get the best sound quality with them using Tidal.

VB: What other sources (if any) does Tidal plan to use to generate revenue?

Chen: Providing the highest quality experience for our $19.99 subscription is what we see as our main revenue stream. That said, we believe there are some parallels between OTT SVOD (Over The Top Subscription Video On Demand) business and there are many unexplored revenue potentials besides advertising which music streaming services should explore. And we believe sound quality is one of these opportunities.