Jay-Z’s streaming platform Tidal is running out of money after losing roughly $44 million before taxes in 2016, a new report claims.
The company reportedly has just six months of working capital left, despite Sprint purchasing a 33 per cent stake in Tidal at the start of the year, which Jay Z’s business partner and Roc Nation Sports president Juan Perez said would last 12 to 18 months.
The Norwegian-developed streaming service’s original investors, including Jay-Z, have lost well over half a billion dollars since acquiring it in 2015, according to the report from Norway’s Dagens Næringsliv.
In response to the report, a Tidal spokesperson said: ‘We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year.’
Prior to this year’s Sprint deal, Tidal claimed to have more than three million paid subscribers.
DN, however, claimed that Tidal inflated subscriber numbers and the count was more around one million.
The Norwegian media site also cites numbers from Midia Research, which claim that Tidal is responsible for less than one per cent of 100 million streaming subscribers worldwide.
For comparison, Spotify reported $581 million in losses in 2016, but revenue was around $3 billion.
Tidal has marketed itself as the choice for audiophiles through higher-quality files than most rivals, but its premier service – at $19.99 a month in the United States – is twice as expensive.
Jay Z bought Tidal in 2014 from Aspiro, a Norwegian company that is listed in Sweden, for $56 million.
Jay Z and other top names in music – including Madonna, Daft Punk and Coldplay’s Chris Martin – in March 2015 unveiled Tidal, promising to give artists greater control in the fast-growing industry of streaming, which allows unlimited, on-demand listening.
The streaming service has sought to win customers by providing original content and early releases from Tidal’s superstar artists including Jay Z, Beyonce, and rapper Kanye West.
But the company has struggled against competitors like Spotify and Pandora, which offer free subscriptions.
SOURCE: Daily Mail – Kelly McLaughlin