Why Is A Norwegian Newspaper Going After Tidal?

Why Is A Norwegian Newspaper Going After Tidal?

It seems Tidal is under attack — an attack started by a Norwegian newspaper. First, the newspaper claimed that the music streaming service owned primarily by rap mogul Jay-Z was faking streams, especially for Beyonce and Kanye West.

Now Norwegian financial newspaper Dagens Næringsliv (DN) is claiming that Tidal is not paying record labels on time.

This begs the questions: Why is the Norwegian media going after Tidal so hard? Is it because of Tidal rival Spotify?

The timing is curious as the attacks on Tidal started less than a month after Spotify went public.The latest revelation, according to the newspaper, is that Tidal is “significantly behind with its royalty payments to music industry rights-holders,” Music Business Worldwide reported.

DN claims Tidal is late in paying three major international record companies, including two Norway-based music businesses–independent label Propellor Records and its distributor, Sony-owned Phonofile.

“It is correct that there are delays in payments from Tidal,” said Sveinung Rindal, CEO of Phonofil /head of The Orchard in Norway.

“We have not been paid since October,” Frithjof Boye Hungnes, CEO of Propeller Recordings, added.

Other parties claiming that Tidal has not paid them for months include successful local artists Bjørn Gunnar Sando–drummer and manager of Hellbillies–in addition to ‘Ravi’ Johansen, Music Business Worldwide reported.

Just last week, Tidal was accused of manipulating streaming numbers for its two biggest ever exclusive album releases–Beyoncé’s “Lemonade” and Kanye West’s “The Life Of Pablo.” The newspaper said it had obtained a hard drive which contained data that proved Tidal had faked streams.

Tidal has denied all these charges and has accused accusing DN of a “smear campaign” against it.

Yet these newspaper reports have led to Tidal being put under investigation.

“Norwegian collection society Tono, which represents around 30,000 songwriters, has filed an official police complaint against Tidal, encouraging the authorities to look into the claims of streaming manipulation,” Music Business Worldwide reported.

And, Danish collection society Koda has announced it will be undertaking an independent audit of Tidal data. It’s been reported that Tidal reduced its recorded music royalty payout in April last year from a 62.5-percent share of its revenue to 55 percent.

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Still, why is it only the Norwegian press and artists that are complaining about Tidal? Does It have something to do with Tidal rival, Spotify, which is a Swedish entertainment company? Or is it because Jay-Z took over the former Norwegian company?

In 2015, Jay-Z bought Aspiro, Norwegian parent company of a streaming service formerly known as Wimp, for $56 million.

In September of that year, he tweeted that Tidal had hit the 1 million-member milestone. Internal payments to record labels cited in Norwegian publication Dagens Næringsliv said it was closer to 350,000. Six months later, Tidal claimed it had reached the 3 million subscribers. The Norwegian newspaper said was closer to 1 million. “No further numbers have been circulated,” Variety reported. In 2017, Jay-Z sold a third of the company to Sprint based on a $600 million valuation.

In late April, Spotify went public. Spotify claims 157 million monthly active users in 61 countries, 71 million of which are in its premium paid-subscription tier.

“While Spotify is losing vast sums of money every year, its path to profitability is unclear and it has hedged its bets on Wall Street by going with a direct listing rather than a traditional initial public offering, it has a solid lead globally over the No. 2 service, Apple Music, and its name has become synonymous with streaming for many people,” Variety reported.

Spotify is still the leader, especially in the U.S. The company claims 41 percent of the U.S. market share, beating music services from Apple, Amazon, Pandora, Soundcloud and Tidal. However, “Spotify has yet to turn a profit, despite increasing revenue 38 percent to about $5 billion in 2017 from the prior year. Losses topped $1.5 billion for 2017, up from $662 million the prior year,” USA Today reported. 

Still, it seems time will tell why Tidal is under attack. Maybe the outcome of the investigation will reveal why. But for now, the negative publicity isn’t helping Tidal in its struggles.

After struggling to retain subscribers, Jay-Z is offering former customers a 20 percent discount to return to Tidal. In this photo, Jay-Z gestures while walking to his seat during the first half of Game 3 of basketball’s NBA Finals between the Golden State Warriors and the Toronto Raptors in Oakland, Calif., Wednesday, June 5, 2019. (AP Photo/Ben Margot)