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Recode: Tidal Has 'Much Less Less To Offer' Apple Than Beats Did

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Recode: Tidal Has 'Much Less Less To Offer' Apple Than Beats Did

The Wall Street Journal reported that Apple Inc. (NASDAQ: AAPL) is engaged in talks to acquire Jay Z's streaming music platform, Tidal. The report was also confirmed by Recode, which took a deep dive into a potential acquisition and what it would mean for the entire streaming music space.

Related Link: Apple May Be Interested In Jay Z's Tidal, But Sources Say It Won't Happen

According to Recode's Dan Frommer, the fact that Jay Z and his company are in talks with Apple and its "deep pockets" is not particularly surprising as Tidal has been looking for a buyer for quite some time. But why is Apple interested in Tidal and how much would it pay for the company?

Delving Deeper

Frommer stated that Tidal has "much less to offer" Apple compared to Beats. When Apple acquired Dr. Dre and Jimmy Iovine's company in 2014 for $3 billion, it acquired not only a hardware business that sells expensive headphones, but it was acquiring key executives such as Dre and Iovine.

Meanwhile, Tidal only boasts 4 million paying subscribers, all of whom Apple can't move to its own streaming music platform by default.

Related Link: The Battle Between Spotify And Apple Heats Up

On the other hand, Apple could gain Jay Z's strong consumer marketing and stellar relationship with his fellow artists. As such, Apple wouldn't have to worry about not having access to stream music available just on Tidal's platform. Although, it is possible that Tidal's artist and label deals will no longer be valid if Apple were to acquire the company.

Finally, Apple has a major advantage in that it could negotiate an acquisition of Tidal out of strength. Samsung (SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF)) was said to have walked away from acquisition talks, Spotify can't afford to dish out the cash for an acquisition. The only possible competing bid could come from Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), which "could possibly also be interested for similar reasons as Apple."

 

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