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Tidal: No Apple Deal, Mounting Losses, Unpaid Bills

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Rumours that Apple would be buying Tidal briefly flared earlier in the year, with some suggesting that the acquisition would be a valuable aid to Apple’s battle with Spotify. I was sceptical and so it appears was Apple, with Jimmy Iovine dismissing talk of a deal in an interview with Buzzfeed.

On the back of news that Tidal’s losses are mounting it would appear that Jay-Z’s gamble to acquire, pump and then exit the service aren’t going to plan.

Currently the service claims 4.2 million subscribers, from which it managed to make a net loss of $28m in 2015. That doesn’t suggest that Tidal is doing a great job of balancing payouts to artists for exclusive deals, streaming costs and operational costs against revenue that grew 30% year on year.

There’s also the question of why the company hasn’t been paying its bills, as reported in the Norwegian press.

Now that an exit to Apple appears to be firmly off the table what happens next? A streaming company owned by artists might sound like a good idea, but if its main selling point is exclusivity then streaming music customers have already voted with their feet. It isn’t a big draw.

Tidal probably has a place as a niche music service, but if it’s going to make it a profitable niche it needs to address its profligacy. Costs trebled between 2014 and 2015. By the time 2016 results roll in a further increase would be a particularly bad sign, especially if it isn’t matched by a much higher jump in revenue.

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