Apple is in talks to buy the streaming music service Tidal, according to a report from the Wall Street Journal.
The deal would help Apple boost its own growing streaming service, Apple Music. Talks are ongoing and may not necessarily lead to a deal, sources described as familiar with the talks told the WSJ.
Tidal is closely associated with rapper and business mogul Jay-Z, who bought the streaming service from a Swedish company in 2015, as well as Beyonce and Kanye West, who co-own the service with Jay-Z. But despite the company's enormous star power, Tidal has struggled stay afloat in the increasingly competitive music streaming landscape. It has just 3 million subscribers compared to Spotify's 30 million and Apple Music's 15 million.
Buying Tidal could help Apple close the gap with Spotify, which has long dominated music streaming.
"Apple right now is a huge threat to Spotify just because of its trajectory. They have half the amount of paid users that it took Spotify eight years to get to, 30 million versus 15 million," CNET editor Brian Tong told CBSN.
In some ways, Tidal would be a surprising acquisition for Apple. In addition to its relatively small subscriber base, Tidal has had a string of well-publicized struggles in the past year. Last summer, its CEO left after just three months on the job. In April, Kanye West was hit with a class action lawsuit from a fan who said his waffling over where fans could get his new album "The Life of Pablo" -- West originally said he would only put in on Tidal, but then abruptly changed course and put it on Apple Music, Spotify and Google Play Music -- was a deliberate ploy to convince millions of new customers to subscribe to Tidal.
At the same time, Tidal has unique strengths. Helmed by Jay-Z, who has deep relationships within the music industry, the service is known for exclusive content with big-name artists designed to entice new consumers to subscribe. Beyonce's hit visual album "Lemonade" was available only on Tidal at first, though that exclusive window lasted just 24 hours before the album hit iTunes. After Prince's death, Tidal released 15 rare albums from the prolific pop star.
Those industry relationships and brand associations could be part of Tidal's appeal to Apple. The Cupertino, California tech giant has shown signs in recent months of trying to bolster its personal relationships with popular artists. Earlier this year, Apple even financed Drake's "Hotline Bling" video, which was then released exclusively on Apple Music.
"They're trying to build these powerhouse relationships with all these top artists," Tong said.