Jay Z’s Tidal Denies Rumors Of Stalled Growth, Predicts Being Profitable In 2018
Tidal is running out of money, according to Norwegian business newspaper Dagens Næringsliv.
Entrepreneur Jay Z bought the music streaming app in 2015 for $56 million from Norway-based Schiibsted Media Group.
Tidal may only have six months of working capital left. User growth has stalled — a claim that Tidal denies, The Verge reported.
Tidal made headlines in January 2017 when Sprint purchased 33 percent of the streaming platform for $200 million. The Sprint investment gave Tidal “sufficient working capital for the next 12-18 months,” said Juan Perez, Jay Z’s business partner and Roc Nation Sports president, at the time, according to DN. Tidal claims it will break even soon and become profitable in mid-2018.
A net worth of $810 million-plus made Jay Z the second wealthiest rapper in 2017, according to Forbes.
“We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year,” a Tidal spokesperson told The Verge.
Tidal reportedly lost around $44 million before taxes in 2016, according to DN. By comparison, Spotify — the Sweden-based music, podcast, and video streaming service — lost about $581 million with revenue of about $3 billion.
Some Black influencers see being a paid subscriber on Tidal as a required vote of confidence for Black business. Some Black consumers are turning their back on illegal music downloads in favor of paying for good music with cultural loyalty in mind.
The size of Tidal’s subscriber base has been the subject of some controversy.
Spotify claimed to have 60 million subscribers as of July and Apple Music claimed 30 million as of September, Engadget, reported.
In September 2015, Jay-Z tweeted that Tidal had hit the 1 million member mark. Internal payments to record labels reflected a number closer to 350,000, Dagens Næringsliv reported.
Six months later Jay Z said Tidal had 3 million subscribers, but that number was closer to 850,000. “Meanwhile, Tidal had internally circulated a figure of 1.2 million subscribers. Since then, the company has kept quiet about user numbers,” according to Engadget.
LaToya Hagler has been a Tidal subscriber for at least two years and she has no complaints, she told Moguldom in August.
“The user interface and catalog has steadily improved,” Hagler said. “I choose Tidal because it is artist owned and pays the most to the artists. I believe we should place appropriate value on music. Would never go to Spotify.”
Edward Bowser, a content marketing expert and blogger for Soul In Stereo, said he’s not sure if he can trust subscription numbers he has seen for Tidal.
“There have been accusations of inflation for a while now,” Bowser said in an August Moguldom report.
“Tidal was supposed to be the one,” Gizmodo reported. “A streaming service run by artists, for artists, featuring high fidelity audio and a business model that would share more of its revenue with the people that actually made the music.”
The biggest complaint Bowser said he hears from music fans is the gimmicky nature of the Tidal exclusives –- “strong-arming fans into signing up just to hear the new Bey/Kanye/Jay albums doesn’t go over well for many of them.”