High Res Audio Streaming Company Tidal Is Struggling, Now Looking For Cash
Tidal, the audio streaming service that is loved by audiophiles and 24 bit, high res audio enthusiasts has reported a doubling in losses.
In the year rap mogul Jay Z took control of Tidal, the music-streaming service more than doubled its losses, burning cash at a rapid rate. Currently the company is believed to be shopping the new capital.
New financial figures released this week reveal that in 2015 the company lost $28 million despite an increase in demand for their content.
Owned by Aspiro AB, a Swedish holding company tidal saw revenues increase 30% last year as several manufacturers launched new high res audio products.
What is not known is how much money was thrown into marketing Tidal which is known for its lavish parties attended by music celebrities.
The Wall Street Journal said that the spill of red ink at Tidal parent Aspiro illustrates the challenge the music-streaming service faces in competing with much-larger rivals such as Spotify and Apple’s Apple Music.
Despite significant marketing efforts, Tidal is stuck between consumers reluctant to pay for tunes they can easily access free, and record labels, which often demand upfront payment for copyright fees.
Spotify, while also recording a net loss in 2015, expanded much faster than Tidal, doubling its revenue to 1.95 billion euros ($2.19 billion). Tidal’s parent company had net cash of 35.4 million Swedish kronor at the end of 2015, down from 63.5 million kronor a year earlier. That was despite receiving a cash injection of 93.6 million kronor through a rights issue.
The financial statement, which Aspiro filed with Sweden’s company-registration office Bolagsverket, describes a company straining to pay its bills. Short-term debt to suppliers shot up to 158 million Swedish kronor last year, from 34.7 million kronor in 2014, according to the document.
Aspiro didn’t return calls and messages seeking comment.
In June, Tidal said it has expanded its user base to 4.2 million paying subscribers, many of whom it amassed this year with a string of exclusive releases from artists such as Kanye West, Rihanna and Beyoncé, Jay Z’s wife.
However, that still is far behind its main competitors. Apple Music boasts 17 million paying subscribers, while market leader Spotify has 30 million paying subscribers.
Tidal charges $20 per month for a high-fidelity version of its 40 million-song catalogue and $10 a month for download-quality sound.