Revenue up, but Tidal doubles losses

Music streaming service Tidal doubled its losses last year, the Wall Street Journal reported on figures released this week.

Tidal doubled its loss from US$10.44 million in 2014 to $28 million in 2015, the year that a group of celebrities lead by Jay Z took it over for $56 million in March. Revenue rose 30% to $47 million.

Of course, early losses does not mean the end for a company, and is often expected. Spotify, for instance, also posted a loss in 2015, but doubled its revenue to $2.19 billion.

According to the Wall Street Journal, Tidal, which employs only 84 people, is straining to pay creditors. It’s said to have defaulted on payment 100 times since March 2015. These included rent to music festivals to taxi companies and hotels.

Its Swedish holding company Aspiro AB is shopping for new capital to get through the year.

It faces the issue of music consumers who can’t see the point of paying for music they can get for free elsewhere, and paying three-quarter of its revenue to record labels in royalties. But in this case, the loss was further caused by the tripling of marketing costs as it moved from being a small time European company to a global contender with many exclusives from superstars.

This year, the service had exclusive releases from co-owners Kanye West, Rihanna and Beyoncé, which saw its user base widen to 4.2 million paying subscribers by June. Beyonce’s Lemonade alone caused 1.2 million extra to subscribe to the service. Estimates have 45% of Tidal’s subscribers opting for its $19.99 high-res premium offer.

But it’s got a long way to go: Spotify has 39 million and Apple Music 17 million.

There was speculation that Jay Z and Apple were talking about buying Tidal and folding it into Apple Music.

Tidal charges $20 per month for a high-fidelity version of its 40 million-song catalogue and $10 a month for download-quality sound.