Lossless streaming music service Tidal is reported to be running out of cash, having run up losses of around $44M last year. Jay-Z and other owners are said to have lost more than half a billion dollars in all.
Norway’s Dagens Næringsliv says that the company now has only enough cash to last it six months, raising the prospect of the service closing down by the summer – despite a $200M investment by Sprint …
However, while Tidal acknowledges that its projections show its capital hitting zero during 2018, it claims that it will climb back from this position and achieve profitability midway through the year.
“[The Sprint] investment, along with other sources of funding, gives the group sufficient working capital for the next 12-18 months,” the company writes in a report signed Juan Perez.
The firm also issued a brief statement on the story.
We have experienced negative stories about us since we started and we have done nothing but grow the company year after year.
Tidal claimed 3M subscribers in January, while an internal report was said to put the number at 1.2M. Research company Midea estimates the current subscriber base to be around 1M. This compares to around 30M for Apple Music and 60M for Spotify.
Tidal’s USP is its Tidal HiFi service, which offers CD-quality FLAC- and ALAC-based streams for $19.99/month, twice the price of competing services. This already put it into niche territory, while the service’s focus on limited music genres has further limited demand. Jimmy Iovine recently said that streaming music is ‘not a great business‘ if that’s your only source of revenue.
Tidal for iOS was updated with support for Apple’s CarPlay and iPhone X optimization earlier this month.