Tidal, like all music streaming services, is required to pay royalties to record labels each time a song is played. That's how artists get paid for their work, which is an old way of doing things, but it still exists in 2018 with streaming music. Now, Spotify has also fallen behind with royalty payments, but for Spotify, the reason is because it's tough to gauge how much the company owes record labels in royalties – which is something it is working on fixing. But for Tidal, it's a bit deeper than that. Tidal is running out of money. A report that surfaced a few months ago indicated that the streaming music service had around six months of working capital left.
The report, coming out of Dagens Næringsliv, shows that it has been around six months since the last royalty payment from Tidal to various record labels. The report cited numerous sources that have said that Tidal is behind on royalty payments "directly to the three major international record companies." Two executives from a label and its Sony-owned distributor have said that they haven't seen royalty payments for the past six months. Music Business Worldwide has also posted a report, citing Sveinung Rindal, CEO of Phonofile (a Sony subsidiary) that "it is correct that there are delays in payments from Tidal" Additionally, Frithjof Boye Hungnes, CEO of Propeller Recordings stated that they have not "been paid since October" and continued by saying that people are upset and thinking about withdrawing from offering their music on Tidal.
Tidal has been around for a few years, but it hasn't been a good few years for Tidal. Its service is more expensive than its major competitors, Spotify, Google Play Music and Apple Music, with the major differentiator being the lossless audio here, which while it sounds good, many aren't going to pay nearly double per month to get that upgraded audio experience. Tidal has landed some exclusives and a partnership with Sprint which helped grow the user-base but it is still losing a lot of money. That is typical for streaming music services, after all, Spotify just went public after not turning a single profit since it began in 2008. It's a tough road for streaming music players, but Tidal is in deeper than many other services.