When rapper Jay-Z relaunched the Tidal music streaming service in 2015 he lined up some of the biggest stars in the music industry. As reported by Billboard, Madonna, Rihanna, and Kanye West were among the “artist investors” at a glittering launch event in New York City. Jay-Z promised that Tidal would be different, new music from some of the industries biggest names would be released exclusively on Tidal, and both music and video would be streamed in high-definition lossless format.
The question that industry analysists pondered was whether Tidal could attract a sufficient number of subscribers at a cost that was double that of its rivals, Spotify and Apple Music. Almost since its launch, there have been claims that Jay-Z had made a huge mistake with Tidal. Even with huge releases, like Kanye West’s Life Of Pablo, being exclusively released on Tidal, the streaming service has struggled to attract subscribers. Even after a $200 million cash injection from Sprint earlier this year, Tidal has been losing money and numerous reports are now claiming that Tidal will run out of cash within six months.
According to USA Today, report that Tidal lost $44 million last year and that it could go bust in 2018. Jay-Z’s problem seems to be a failure to attract sufficient numbers of subscribers to Tidal. The company claims to have three million subscribers, but according to the Daily Mail, the true number is more like one million.
Of course, since it launched the doomsayers have claimed that Tidal’s business model is flawed and that Jay-Z was set to fail. The company has a very different view, and a spokesman for Jay-Z has pointed out that the company continues to grow.
“We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year.”
It should be borne in mind that Tidal came into the market to challenge two huge players in the streaming market. Spotify dominates the streaming market, a press release from the company earlier this year Spotify announced that it has over 60 million subscribers among its 140 million users. Apple has the advantage of having its Apple Music streaming service built into its operating system and now has around 30 million subscribers.
Jay-Z’s Tidal may have lost $44 million during 2016, but those numbers are dwarfed by Spotify’s losses. According to Billboard, Spotify lost over $581 last year, double its losses from the previous year.