This is not the way Jay-Z reached the royal throne of rap music.
The hip hop heavyweight’s Tidal music service is hemorrhaging the type of money that would fill up a fleet of Brinks trucks – meaning tens of millions of dollars. It reportedly lost roughly $44M in 2016 alone, and has lost about $60M total, a Norweigen business newspaper reported.
The hefty loss estimates come from Verge-spotted report from Norway’s Dagens Næringsliv, the same business-centric newspaper that allegedly exposed Tidal as greatly exaggerating its subscriber stats. Tidal said last year it had hit 3 million subscribers, but the newspaper claimed the number was closer to 1 million.
For comparison, Spotify is killing the competition with an estimated 60 million subscribers, while Apple Music has more than 30 million – light years ahead of Tidal, even if the 3 million subscriber count is even close to being accurate.
The new report also claims the streaming service, which was acquired by Jay-Z back in 2015 and secured a Sprint stake this January, has about six months of capital remaining.
Tidal is far from the only streaming service to lose money last year. Spotify lost an estimated $581M last year against revenue of $3B.
But there is one huge difference between the two. Spotify charges $9.99 a month for Premium, but users can also use the service for free.
Tidal, meanwhile, requires all users to pay, with subscriptions at $9.99 per month.
Prior to this year’s Sprint deal announcement, Tidal claimed to have surpassed 3 million paid subscribers. Of those users, Tidal said at the time, 45 percent had selected the $19.99 per month plan. Dagens Næringsliv later disputed these figures.
“We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year,” a Tidal spokesperson explained to Verge Tuesday. Tidal is reportedly still expecting to achieve profitability by the middle of next year.
In August, Tidal bagged its fourth CEO in just over two years. Former Kobalt Music Group boss and Sony Music global marketing president Richard Sanders took over for Jeff Toig, whose exit was announced in March. Toig, a former SoundCloud exec, had been CEO since January 2016.
Jay’s Grammy-nominated album 4:44 launched as a Tidal x Sprint exclusive in June, the latest in a series of exclusives for the platform that’s previously given similar rollouts to Kanye West’s The Life of Pablo and Beyoncé’s Lemonade.
While the rollouts helped increase the subscriber base, it wasn’t a sufficient enough tourniquet to stop Tidal’s bleeding, and it didn’t get Tidal close to the industry leaders.