While Jay Z's music streaming service, Tidal, recently boasted about hitting three million subscribers, things are far from peachy for Aspiro, the Swedish company which officially owns the app. According to an analysis of a certain legal filing conducted by The Wall Street Journal, the company lost 239 million Swedish kronor, i.e. over $28 million. That's almost three times more than the 88.9 million Swedish kronor loss posted in 2014. Sources with knowledge of the matter also claim that Tidal currently has over 100 outstanding bills to pay and is generally in a pretty poor shape.
Despite that, the company still has something to boast about. In addition to the aforementioned three million subscribers, Tidal's revenue rose just like its losses and was 30% higher in 2015 in comparison to the year before. Other than that, the company can also find some solace in the fact that the music streaming service business in general hasn't exactly been profitable in recent years. By far the biggest player in the industry is Spotify which posted €184.5 million in operating losses for 2015 and €165.1 million in 2014. However, Spotify's revenue rose 80% in 2015 and the service boasts 40 million subscribers so its business is still perfectly sustainable.
On the other hand, Tidal is facing bigger issues as it seems like its long-term business strategy based on acquiring high-profile exclusives isn't exactly paying off, at least not in comparison to the competition. Namely, the said exclusives which were mostly acquired thanks to Jay Z's connections to the music industry proved to be a great method of acquiring new customers but a poor way of retaining them. As if that wasn't enough, Tidal has also recently been hit with a lawsuit over unpaid royalties filed by Yesh Music Publishing and John Emanuele which are claiming more than $5 million of unpaid royalties. That's definitely not the sort of PR any music streaming service would be happy about but Tidal's image is especially vulnerable to such accusations as the company claims it's paying more royalties to its artists than the likes of Apple Music and Spotify. All in all, it's obvious Tidal needs to rethink its long-term strategy as the numbers it's currently achieving aren't indicative of a successful future.