Tidal May Have Been Wildly Inflating Subscriber Numbers

David Z. Morris

<p>A <a href="http://www.dn.no/staticprojects/special/2017/01/20/1100/musikk/project-panther/">new investigation</a> published by Norwegian business daily <em>Dagens Næringsliv</em> alleges that Tidal, the music streaming service co-owned by Jay-Z and more than a dozen other music stars, has persistently inflated its subscriber numbers in statements to the media, the public, and investors.</p><div class="paywall-selector"></div><div class="paywall">
<p>The authors of the investigation, Markus Tobiassen and Kjetil Saeter, based their findings on interviews with Tidal staff and internal documents (Tidal began life as part of Aspiro, a Norwegian company).</p>
<p>“In April 2016, one month after [a] press release issued by the company claiming three million members, Tidal made payments to the record labels for around 850,000 subscribers,” reads a translation of the report provided to <a href="http://www.digitalmusicnews.com/2017/01/20/jay-z-tidal-fraudulent-subscribers/">Digital Music News</a>. “The figure reported internally by Tidal in April is 1.2 million subscribers.”</p>
<p style="text-align:center;"><em><a href="https://fortune.com/getdatasheet/">Get Data Sheet</a>, </em>Fortune<em>’s</em><em> technology newsletter.</em></p>
<p>The inflation was achieved in part, the report claims, by re-activating tens of thousands of old accounts. The numbers may have been further goosed by the inclusion of users on limited-time free trials. The April subscriber report came shortly after the release of Kanye West’s <em>The Life of Pablo</em>, which was for a time a Tidal exclusive, and the death of Prince, whose catalog was also exclusive there.</p>
<p>Those events drove a <a href="https://fortune.com/2016/02/15/kanye-west-pablo-tidal/">groundswell of interest</a> in the service. But analysts have since used financial data to estimate that, minus those on free trials, Tidal had only around <a href="https://www.midiaresearch.com/blog/music-subscriptions-passed-100-million-in-december-has-the-world-changed/">one million paying customers</a>.</p>
<p>The “three million subscribers” claim was widely reported in the media, including by <a href="http://www.billboard.com/articles/columns/hip-hop/7317826/tidal-three-million-global-subscribers-kanye-west-pablo-streams">Billboard</a> and <a href="http://time.com/4276187/tidal-3-million-subscribers/">Time</a>.</p>
<p align="center"><em>For more on Tidal, watch our video.</em> <div class="vodvideocontainer" style="position: relative; padding-bottom: 56.25%;"><iframe src="//fortune.com/videos/embed/c8edea5e-37e5-4256-b533-ed3fd52efcbf" style="position: absolute; top: 0; left: 0; width: 100%; height: 100%; overflow: hidden;" scrolling="no" frameborder="0" allowfullscreen></iframe></div></p>
<p>Tidal has premised its appeal to customers mainly on exclusive music and video content. Last March, Spotify announced that it had signed up <a href="https://fortune.com/2016/03/21/spotify-million-subscribers/">30 million</a> paying subscribers, and is now <a href="https://fortune.com/2016/12/01/spotify-profit/">approaching profitability</a>. By contrast, Dagens Næringsliv claims Tidal is losing tens of thousands of dollars a day, and is having trouble paying royalties and other expenses. Even if Tidal’s reported subscriber numbers were accurate, then, it would seem Spotify’s prioritization of curation over exclusive content has won the day.</p>
<p>If the accusations of deception at Tidal prove out, there will be a bit of irony involved – Jay-Z has accused the previous owners of <a href="https://fortune.com/2016/03/31/jay-z-previous-tidal-owner/">inflating their own numbers</a> before he bought the company.</p>
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Tidal May Have Been Wildly Inflating Subscriber Numbers | Fortune

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