It’s a year since Tidal relaunched following its acquisition by a company controlled by Jay-Z, who subsequently brought on other co-owners from the musician community.
However, besides celebrating that anniversary with new stats – 3m subscribers and 250m streams of the latest Kanye West album – Tidal appears set to ignite a legal battle with Tidal’s former owners.
Media group Schibsted and VC firm Verdane, who owned majority stakes in Aspiro – the company whose WiMP streaming service became Tidal – are the targets for a potential lawsuit from Tidal’s current owners, according to reports in the Norwegian press.
Originally reported by Dagens Næringsliv and subsequently followed up by Breakit, the key to the dispute is whether Tidal’s subscriber figures and financial performance were communicated accurately before the acquisition.
Letters sent to Schibsted and Verdane by Tidal reportedly accuse them of “significantly” exaggerating the service’s users as 503k before the acquisition, while also claiming that the business was in worse condition than had been revealed.
The claims are highly controversial, since Aspiro was a public company in Norway, regularly reporting its latest numbers and financial performance.
Breakit reports that Schibsted’s spokesperson has said that the company is “unsympathetic to the letter and any requirements… we want to point out that it was a publicly-traded company that was acquired, with what that means for transparency of financial reporting”.
Aspiro’s year-end report for 2014, published in February 2015, claimed that the company’s net sales in 2014 were SEK 303.2m ($37.2m at today’s exchange rate), while its net loss for the year was SEK 84.1m ($10.3m). The company claimed it had 500,000 paying users at the end of 2014, including 35,000 on its HiFi tier.
Update: Tidal has provided this statement to Music Ally: “We are excited that one year after Tidal launched, we have surpassed three million subscribers globally. The growth in our subscriber numbers has been even more phenomenal than we’ve previously shared,” said a spokesperson.
“It became clear after taking control of Tidal and conducting our own audit that the total number of subscribers was actually well below the 540,000 reported to us by the prior owners. As a result, we have now served legal notice to parties involved in the sale. While we cannot share further comment during active legal proceedings, we’re proud of our success and remain focused on delivering the best experience for artists and fans.”
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