Tidal is burning through its final rounds of cash, according to reports.
The music streaming service is struggling financially as its user growth stalls. A new report from Norwegian site Dagens Næringsliv claims it might only have enough working capital to last six months.
"We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year," a Tidal spokesperson said. The company reportedly claims it will break even soon, before achieving profitability sometime next year.
The report claims Tidal lost around $44 million before taxes in 2016. Even still, rival music streaming service Spotify's losses were much larger — around $581 million — but its revenue was around $3 billion.
Such negative news for Tidal comes despite Sprint buying a 33 percent stake in Jay-Z's streaming service back in January. The deal, worth $200 million, apparently gave Tidal sufficient working capital for the next 12 to 18 months, according to Roc Nation Sports president and Jay Z's business partner Juan Perez.
Tidal's User Growth
Tidal has been steadily growing in the past several years, at least according to Jay-Z himself. In 2015, the Grammy-winning artist said the service had hit 1 million subscribers, but the same Norwegian newspaper claimed it was merely somewhere around 350,000. About six months later, he claimed the number had increased to 3 million, but it was actually 850,000. Ever since, Tidal has chosen to keep mum about subscriber numbers.
Though it's difficult to determine whether Tidal truly is burning through its final six months of cash, it's easy to imagine that the service is not as successful as its rivals, namely Spotify, Apple Music, and perhaps even Google Play Music. In July, Spotify announced that it has more than 60 million subscribers, while Apple Music has half of that figure.
What Is Tidal?
Tidal is a music streaming service, so far the only one that offers high-fidelity streaming, meaning subscribers can listen to uncompressed music formats and hear the songs at optimum quality, provided they have the necessary equipment, like a nice pair of headphones and an audio DAC. It cost $9.99 for the standard premium service, and $19.99 for the lossless, high-fidelity service.
Are you subscribed to Tidal? Do you think the service stands a chance against its big-name rivals? As always, feel free to sound off in the comments section below!