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Tidal analysis

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This group analysis of Tidal streaming service was conducted in a Marketing Management course. It includes thorough research in the company's current operations, as well as a fully integrated marketing mix of recommendations to help the company gain market share and boost positive consumer perception.

Published in: Business
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Tidal analysis

  1. 1. Jiajie He — Sarah Horn — Ryan Mulvihill-Pretak — Manny Pham
  2. 2. Analysis
  3. 3. Value Proposition ➢High fidelity (hi-fi) music files (1411 kilobytes per second, vs. 320 kbps) ➢Direct and transparent financial benefits to artists: first-tier artists (16) each received 3% of the company share and second-tier artists a smaller amount ➢Exclusive content from artists “Seamless listening across mobile, tablet, desktop and network players. Enjoy lossless music streaming on Apple devices from iPhone, iPad and iPod to Mac, as well as on PC and Android systems. Plus integration in a wide range of high fidelity network players.” - Tidal website
  4. 4. Company March, 2015 ➢ Jay-Z acquired Aspiro for $56 million ➢ Jay-Z relaunched Tidal with celebrity-packed press conference November, 2015 ➢ Over 1 million subscribers ➢ Company executives exiting ➢ **Failing to gain traction**
  5. 5. Context Music Industry Landscape Physical Woes VS. Digital Delight 1H (first 6 months) Revenue of 2015:$3.2 billion ➢Physical Formats: $0.77 billion 14% ➢Streaming Service:$1.02 billion 19% ➢Permanent Downloads:$1.28 billion 2.5%
  6. 6. Context Streaming Service Landscape Freemium VS. Subscription Total Streams of 1H 2015:$1TRILLION! ➢Subscription Service: 25% ➢SoundExchange Distributions: 20% ➢On- Demand Ad-Supported: 27% Note: $0.006 to $0.0084 per stream 1500 streams= 1 album ($9)
  7. 7. Context Profit Distribution System ➢Artists earn 7% ➢Record Labels grab 45% ➢Streaming Platform get 20% ➢Songwriters and publishers split 10%
  8. 8. Consumer ➢Audiophile/DJ/Music enthusiasts ➢Regular Americans listening to radio on daily basis ➢From Millennials to Gen Z
  9. 9. Consumer
  10. 10. Competition
  11. 11. VS. ➢ 75M users, (20M paid subscribers) ➢ Spotify Free ($0.00), with ads ➢ Spotify Premium ($9.99), ad-free ➢ Family plan ($5/mo/extra person), 50% student discount ➢ Desktop and mobile apps for most ➢ 1M subscribers ➢ Tidal Premium ($9.99), ad-free, 320 kbps ➢ Tidal HiFi ($19.99), ad-free, 1411 kbps ➢ No desktop or mobile app for Windows Phone, Phone, Mac, etc. ➢ Pays more to the artists than competitors (all miniscule amounts, even still)
  12. 12. ➢Record labels ➢Ticketmaster ➢Artists (hip-hop especially): Jay Z, Beyoncé, Rihanna, Nicki Minaj, Alicia Keys, Kanye West, Calvin Harris, Daft Punk, Madonna ➢Unsigned (independent) artists Collaborators
  13. 13. Product ➢ 40 million songs ➢ 90,000 music videos ➢ Tidal Rising ➢ Tidal Discovery ➢ Exclusive Dramas ➢ Exclusive Comedies
  14. 14. Price TIDAL HiFi: $19.99 in the US £19.99 in the UK €19.99 in Europe $96 HKD in Hong Kong TIDAL Premium: $9.99 in the US £9.99 in the UK €9.99 in Europe $48 HKD in Hong Kong Apple charges a 30% surcharge on the monthly subscription. Students in the US are eligible for a 50% discount. Discounted family plans are available.
  15. 15. Promotion ➢ October 20: Tidal X concert ➢ Made in America Festival ➢ Barclay’s concerts ➢ Celebrity endorsements ➢ Social media presence
  16. 16. Place ➢Mobile Apps ➢Desktop Options: Windows, Mac and Web Player ➢Home Audio Compatibility: Sonos, etc.
  17. 17. Value Proposition, revisited 1. Indifference towards HIFI music a. Lack proper equipment to distinguish between low-bitrate and hi-fi audio b. Mobile users: concern of larger data usage for essentially similar content - corresponding to US data plan 2. Consumers indifferent to artists’ benefits 3. Left with . . . exclusivity 1. High fidelity (hi-fi) music files (1411 kilobytes per second, vs. 320 kbps) 2. Direct and transparent financial benefits to artists: first-tier artists (16) each received 3% of the company and second-tier artists a smaller amount 3. Exclusive content from artists
  18. 18. Recommendations
  19. 19. Pricing BEFORE: Tidal Premium ($10/mo) - 320kbps Tidal HIFI ($20/mo) - 1411kbps Change offerings by blending sound quality of Premium and HIFI together. 320kbps is still HQ sound, and the average target consumer does not care about any extra quality. May anger small group of people (some past HIFI subscribers), but making the product cheaper and simpler will gain subscribers. NOW: Tidal Premium ($9/mo) - music-only Tidal Xclusive ($15/mo) - full-content
  20. 20. Pricing Premium ($9): cheaper than before, cheaper than competition -> gain greater market share! Xclusive ($15): cheaper than old HIFI with a lot of interesting content -> unique differentiation! Approximate growth rates - Cheaper price (Premium) and quality, unique product (Exclusive) will increase subscribers, with approximately increasing growth rates for 3 years.
  21. 21. Promotion ADVERTISING ➢ Free college concerts ➢ Student fairs (College Fest) ➢ #SocialMedia presence ➢ College ambassadors ➢ Popular music shows (The Voice) Spread awareness, build positive DISCOUNTING ➢ Student Discount & Family Plans ➢ Reference Discounts ➢ Conversion Discount: old Premium ($10) to new Exclusive ($15), get first year with no price change. ➢ Emphasize free trial Gain more subscribers and market share Promote to target audience: young people
  22. 22. Product ➢ Focus on exclusive contents by artists for fans ○ Video premieres ○ Bonus tracks and demos ○ Behind-the-scenes in the studio ➢Optimize customer experience ○ Tailor tempo-matching playlist for runners
  23. 23. Place In-Car Entertainment ➢Spotify with BMW How about Tidal with Chrysler? ➢Spotify with Uber How about Tidal with Lyft?
  24. 24. Jay-Z and Samsung ➢History of partnership (MCHG) ➢Jay-Z recently took a meeting with Samsung (rumors flying) ➢Rihanna just signed a sponsorship deal for $25 million
  25. 25. Samsung Partnership Why? ➢ Samsung just shut down Milk Video service and it’s music service isn’t doing well, either ➢ Samsung has 28.7% market share of smartphone users (54.55 million in US) ➢ Apple partnership with Beats How? ➢ Preinstall Tidal on all Samsung devices and give users a free trial ➢ Samsung users get exclusive content vs. other Tidal users ➢ Samsung markets Tidal to customers ➢ 25% retention would be an additional 13.5 million users (50% or 27 million)

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