Is Tidal on the way out?
Tales of financial trouble have plagued Jay-Z owned streaming service Tidal from its inception. The mere mention of the subscription-only platform is likely to bring out “did you hears?” about its potential insolvency (if it doesn’t get a confused “what’s that?”). So, we’ve heard that the sky is falling over Jigga’s on-demand empire before. However, this time it seems like it might be for real.
According to Norweigan newspaper Dagens Næringsliv, the service is hemorrhaging money and might run up against the end of its assets in the next six months.
The paper reports that renowned businessman Jay-Z might have made a bad investment. He paid $56 million for the company back in 2015. According to the latest figures from Næringsliv, the company has lost a considerable amount more than that since the acquisition. They say that Tidal’s total losses account for $60 million, with $44 million of that coming just last year.
However, Tidal denies the allegations that the company is on a collision course with insolvency.
“We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year,” a spokesperson for the Oslo-based company told The New York Daily News in a statement.
The potential bad news comes almost a year after Jay-Z sued the company he bought Tidal from for allegedly inflating their subscriber count before the sale. That did nothing to allay the fears that Tidal was failing.
“The growth in our subscriber numbers has been even more phenomenal than we’ve previously shared,” Tidal said in a Pollyanna-ish statement released at the time.
“It became clear after taking control of TIDAL and conducting our own audit that the total number of subscribers was actually well below the 540,000 reported to us by the prior owners,” they added. “As a result, we have now served legal notice to parties involved in the sale.”
Anders Rikter, the communications manager for former Tidal parent company Schibsted, said that they did no such thing.
“We disagree with the accusations in the letter and any potential claims,” he told NYDN. “We believe the information given by the company Aspiro has been very thorough and open and communicated clearly.”
The same Norwegian paper that reported the potential downfall of Tidal also released a report that said Tidal was inflating its own subscriber numbers post-sale. While Tidal was claiming around 3 million subscribers, Dagens Næringsliv says the number is closer to 1 million. To put that in perspective, Spotify has more than 60 million subscribers and relative newcomer Apple Music has half that at 30 million subscribers.
Outside of that, Tidal seems to be having problems paying its biggest draws. Most people’s first interaction with Tidal came when Kanye West released The Life Of Pablo exclusively on Tidal. However, he’s hit the company with a lawsuit that says they owe him at least $3 million and he considers his exclusivity deal with Tidal void because of non-payment.
Via TMZ’s coverage of the suit:
“Our sources say a month ago Kanye’s lawyer sent a letter to Tidal, saying the company was in breach and the contract was terminated. Over the next 2 weeks lawyers for both sides tried to resolve the conflict but failed. We’re told 2 weeks ago Kanye’s lawyer fired off a second letter declaring again the contract was over.”
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