Roger Fingas
Tidal, the on-demand music service owned by rapper and businessman Jay-Z, could have as little as six months' worth of cash on hand, according to reports.
This is despite Sprint taking a 33 percent stake in the company in January in a deal worth $200 million, noted Norway's Dagens Naeringsliv, cited by Engadget. A Tidal document reportedly said the investment would give the service "sufficient working capital for the next 12-18 months."
The company has denied any suggestions of an impending collapse, and even said it expects to turn a profit by the middle of 2018. Its main competition — Spotify — has likewise struggled with profitability, but is also the world's most popular on-demand service and pumping much of its revenue back into growth.
"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 Engadget.
While functionally similar to Spotify and Apple Music, Tidal does offer a "HiFi" tier with lossless audio, and exclusives from artists like Jay-Z and Beyonce. It has also touted itself as paying artists higher royalties, which could help explain its financial difficulties.
Its greater problem however has been attracting subscribers in the face of intense competition. Dagens Naeringsliv has previously accused the company of lying about subscriber numbers, for instance saying that while Tidal publicly claimed 3 million subscribers in March 2016, internal reporting pegged the number at 1.2 million, and payments to record labels mentioned just 850,000. In September, Apple Music was announced as topping 30 million subscribers.
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21 Comments
Couldn’t be happier to see Jay Z & Kanye’s little vanity project fail...
I remember when Kanye tried to “bully” Tim into purchasing this service, by a series of nasty tweets.
I just wish Sprint hadn’t got fleeced into purchasing this turd; giving the pompous investors actually a good return at their shareholder’s expense.
Wait, but wasn't Tidal "the biggest threat" to Apple Music not that long ago?
I have a feeling Spotify won't be able to sustain their business for much longer. I see an acquisition or something else soon.
I love that Tidal offers lossless & MQA formats. But in reality, Spotify's & Pandora's free bit rates are good enough for the vast majority of listening I do. IMHO, to really appreciate CD quality & higher, you need decent equipment and a decent listening environment (meaning quiet). I have such, but rarely have the time to dedicate to serious listening. While I'd love for Apple or one of the other major music streamers to offer CD & higher quality, I recognize such is the realm of enthusiasts - people willing to pay lots of $$$ for what others would consider minimal improvements in quality. e.g. Buying a dedicated subwoofer that goes down to 25Hz rather than using bookshelf speakers, or the speakers built into a TV.
I think Tidal makes a mistake by not offering a free, ad supported tier - like Spotify. I've been using Spotify free for a few years and I am now very used to their UI and way things work. If I ever step up to subscribing to something, I'll most likely go with Spotify because I'm familiar with it, and I'm pretty happy with how it works.
I can't see any business which totally relies on streaming music as being financially successful. It's just a poor business model with possibly too many competitors. I sure would hate to see Spotify and Pandora close shop. I don't stream much music but at the occasional times I do, I have to marvel at how convenient both of those services are. However, I don't know how any of them can compete with companies overflowing with cash with streaming music services only as a side-business.
I don't know anything about Tidal and so I certainly wouldn't miss the service if it went away. It's unfortunate but there are always some companies that are bound to fail. With such a small number of subscribers it likely won't have the staying power to survive. An acquisition of the company is likely its best bet.
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