Remember when a bunch of super wealthy celebrities got up on stage and announced their answer to Apple's iTunes, Spotify, Pandora, and other music streaming services? It was the spring of 2015 and Jay Z, Kanye West, Nicki Minaj, Madonna, Chris Martin, Daft Punk and others hopped on board and promised it would be the first place you could hear new music from artists like Rihanna and Beyoncé. Tidal was going to differ from other music streaming services because it was going to be artist owned.
A new report from a Norwegian newspaper alleges that Tidal lost $44 million before taxes last year. To add insult to injury, its user base has also stalled. It is widely thought that Tidal has only six months of capital left to work with before the company completely runs out of money.
For comparison, Spotify lost about $581 million in 2016. However, Spotify also had $3 billion in revenue for the same time period.
In early 2017, Sprint acquired a 33% stake in Tidal. The $200 million Sprint deal reportedly included at least $75 million for funding exclusive content. At the time, the company claimed that this would give it 12-18 months of working capital. A company spokesman also said it would allow Tidal to reach the break even point in its development, and hit profitability by the middle of 2018. Those are bold claims for a company that has publicly claimed to have three million subscribers but only has about one million in actuality.
Inflating user numbers is not a new thing at Tidal. In the fall of 2015 Jay-Z sent a tweet out saying that Tidal had hit one million subscribers. Payments to record companies from the same time period put the actual number of subscribers in the fall of 2015 at 350,000. About six months later, Jay-Z claimed the company had hit the 3 million subscriber mark. However, internal documents from the company show just 1.2 million subscribers.
For comparison, Apple Music has more than 30 million subscribers and Spotify has more than 60 million subscribers.