It looks as if Spotify and Tidal, two of the most popular music streaming services, are headed in different directions. Spotify has just announced it has hit the 40 million paid subscriber milestone, whereas Tidal's recent financial filings show a huge increase in net losses while failing to post substantial gains in revenue.
It was good news for Spotify, which is by far the most popular paid on-demand music streaming service. The company has announced that it has passed the 40 million mark in paid subscribers, via a tweet by CEO Daniel Ek confirming the news.
"40 is the new 30. Million," tweeted Ek on the morning of Sept. 14, adding a smiley face emoji following his announcement of a new milestone for the streaming music service.
Spotify announced it had surpassed the 39 million subscriber mark on August 25, only 20 days prior, meaning that the company is adding subscribers at a rate of approximately 1.5 million per month. That significantly bests Apple Music's pace of new subscriber additions, which stands at around 1 million per month. At last count, Apple Music reported over 17 million paid subscribers for its music streaming service, introduced last year.
The story isn't so great for smaller rival streaming music service Tidal, which just reported huge losses in its financial filings. Tidal reported net losses of approximately $28 million last year, three times the amount it reported in 2014. It looks as if the biggest issue for the company is royalty payments to record labels, publishers and the like, which accounted for more than 75 percent of its expenditures.
Tidal was launched as the streamer that paid artists more fairly, touting higher payout rates per spin than other streaming music services, and partnering with top artists who own minority shares in the company, whose majority investor is Jay-Z.
That payment policy appears to have backfired somewhat in that while it is costing the company needed cash, it hasn't resonated with music fans as far as inspiring them to choose the service over Spotify, Apple Music and others.
What has motivated subscribers, however, has been the premium $20 high resolution audio tier, which accounts for almost a full half of Tidal's 4.2 million subscribers. Whether that is enough to keep the company afloat remains to be seen. Rumors have been floating for months about a possible acquisition of the company, with Samsung initially named as a suitor, and more recently, Apple Music touted as a potential buyer.