It will have been an uncomfortable weekend for Tidal’s management team, after a lengthy report in Norwegian newspaper Dagens Næringsliv claimed that the streaming service has falsely inflated its subscriber totals in the past.
It’s important to understand the thrust of the investigation though: at this point, it is focusing on milestones that Tidal announced to the public and to the media, rather than on its dealings with its licensors.
Specifically, Dagens Næringsliv claimed that at the time in September 2015 when Jay Z tweeted that Tidal had “1,000,000 people and counting”, the service was actually paying labels for 350,000 subscribers.
Meanwhile, a month after Tidal said in a press release that it had “three million members”, it was paying labels for around 850,000 subscribers. The piece goes on to suggest that Tidal reached around 1.1 million subscribers (according to those label payments) by October 2016.
In itself, the latter figure should not come as a surprise: in Midia Research’s end-of-year analysis published earlier this month, it calculated that Tidal accounted for around one million of the 100.4 million global music-streaming subscribers.
Midia’s Mark Mulligan is quoted in the Dagens Næringsliv piece suggesting that Tidal has “seeded the marketplace with numbers that cleverly lack precise definitions – and so can be easily misreported.”
Media misdirection is far from the most serious offence Tidal could have committed: the accuracy of the subscriber figures used to pay labels is the most important thing here from a legal standpoint – and an aspect to Tidal’s relationship with the music industry that will come back to haunt it very quickly in the event of any delay in reporting and/or payments.
Under normal circumstances, growing from 350,000 paying subscribers to 1.1 million in just over a year – fuelled by some prominent album exclusives – would be impressive. Yet Tidal’s pressing concern, amid industry expectations of consolidation ahead in the streaming market, is where its ultimate exit is going to come from.
With Apple and Samsung seemingly having pulled back from a potential acquisition, concerns about Tidal’s public figures have come at the worst possible time for courting those and other potential suitors.