Breh, what good is playing Lossless files, if you don't have Speakers/Headphones designed to play such music at it's full potential? Tidal isn't being pitched to the average consumer.... if i'm only listening from my phone, you're telling me that i need to go buy high end headphones just to properly use the service?
Better yet, will the average person be able to tell/care about the vast difference between Tidal and Spotify,Rhapsody,Google Play All Access enough to make them want to spend $20 a month on it?
What about the potential subscriber who downloads CD Quality music for free, or uses the Free Version of Spotify because it's on his PS4 and sees no reason to start to pay for a service like Tidal?
You don't "need" high end headphones since so many headphones are out now that are good enough at much cheaper prices, but, it helps.
Secondly, the average listener will be able to tell, but, what I think you mean is will the average listener care about the sound quality? I think most probably won't but, enough will, and that is all that's needed. As long as they make a profit, and its continuous, that's all that matters.
Thirdly, then they just won't subscribe. Its not about having every person use your product, its about WHO is using your product, as that keeps your brand in a certain class. Because a lot of people don't care about sound quality, that is what is needed to separate Tidal from the average. You want to be extraordinary, to create a lifelong brand, and keep consumers with money to spend to keep coming back. Its a luxury brand, its not made for people who are happy to do google searches for CD quality music, or happy with lossy files using stock headphones.
Think about it, why do people buy Mercedes Benz, when they get money? Its because of the luxury brand. The same with clothes. Now they have a streaming service that can be considered a luxury brand, compared to other streaming services.