Here’s TIDAL’s Latest Financial Filing (Warning: It’s Pretty Ugly…)

tidalreport

TIDAL is in serious financial trouble, according to financial documents filed in Sweden.

TIDAL owner Aspiro AB just filed a number of financial statements with Swedish authorities, and the results are a pretty scary.  Aspiro AB, the TIDAL parent acquired by Jay Z last year, posted a net loss of 239 million Swedish kronor, according to the document, or roughly $28 million in red ink.

That represents nearly a threefold increase over 2014 losses, while revenues only increased 30 percent over the same period to 402 million Swedish kronor ($47.2 million).

The documents complement scattered reports of seriously-delayed payments, with one local Swedish Norwegian newspaper, Dagens Næringsliv, pointing to more than 100 delinquent bills.  That includes everyone from indie labels to digital distributors to taxi companies, all of whom seem to be getting stiffed or seriously delayed.

According to the main financial filing, short term debt owed to a range of suppliers increased to 158 million Swedish kronor ($18.5 million), roughly five times the debt of 2014.

Separately, a number of indie labels and artists have been complaining to Digital Music News of delinquent payments.

A separate, second document, specifically for ‘Tidal US,’ outlines net losses of 130 million Swedish kronor, or $15.2 million.  That suggests that a healthy subset of the losses are coming from the US battleground, where competition against incumbents like Spotify and Apple Music is especially fierce.

Digital Music News also found a third document, simply attributed to ‘Tidal International,’ which points to far smaller net losses in the 4 million Swedish kronor range.  If you’re getting confused, please join the club.

Shifting back to the umbrella, Aspiro AB filing, it looks like major labels Universal Music Group, Sony Music Entertainment, and Warner Music Group are draining Tidal of nearly 300 million Swedish kronor, or roughly three-quarters of all revenue.   Those royalty obligations appear to be crippling Tidal during its early stages, though the company has been able to attract a respectable 4.2 million subscribers (at least at last count).

Most impressive is that roughly half of those subscribers are paying approximately $20 per month for higher-end fidelity packages, also according to the company.

Here are the two of the critical filings: first Aspiro, then Tidal US.  Don’t say we didn’t warn you…

Aspiro Annual Report

 

Tidal Annual Report

 

12 Responses

  1. Remi Swierczek

    Spotify is doing equally well.
    Daniel Ek’s proven business model maturing as music business NIRVANA!

    Time to STOP and introduce new game board. Conversion of 100,000 Radio stations and few NERDY streamers to simple discovery based music stores can deliver $100B music business by 2020. Play the best, ad and sub free and charge for additions to personal playlist!

    Reply
  2. Tangerine Dream

    Things look somewhat grim for this outfit.. I was never enamored with Tidal, it always seemed kind if elitist and run by a smug looking rich set..

    Reply
  3. Ratio

    Spotify lost $200M last year. Does that mean it’s doomed 10 times as much? I didn’t get the point of this article. Most of the popular music services (including Spotify, Pandora, Apple an Google) are screwed. And what?

    Reply
    • Remi Swierczek

      Well, they are not federal government, so they are screwed!

      Era of printed money flooding Wall Street and pumped-up IPOs is almost over so I would suggest to basics.
      Actually there is about 20x more cash in traditional monetization of music than in Ek’s DOPE or YouTube style ADS.

      Reply
  4. Universal Indie

    When people were suggesting that Apple was going to purchase Tidal, my response was “what for”? What would the benefit be in purchasing Tidal?

    They all license the same music catalog and if Tidal happens to go under so ends their exclusives.

    Reply
    • Remi Swierczek

      To make stupid investment of mega stars a brilliant investment at Apple’s shareholder expense. Jimmy still might pull off this amazing for future of the music neardland deal.

      Reply
  5. danwriter

    Uber and Lyft have also never posted a profit. It’s part of the model: positioning for the IPO or acquisition.

    Reply
  6. Figure It Out

    So this story will soon fall off the front page, replaced by another, complaining that streaming doesn’t pay “enough. “Enough” to songrwriters and record companies.

    But, when all of these companies are paying fully 3/4 of ALL gross revenue (not “profits” – ALL revenue, before ANYTHING ELSE is deducted) to artists and songwriters, what is “enough”?

    Time to re-adjust the pre-conception that what (and how) us creative folks got paid during the heyday of physical products just isn’t the proper benchmark in the new age.

    As commenter Ratio observed, virtually every popular music service,including Spotify, Pandora, Apple an Google are all screwed. Bled dry by the old guard and their need to keep making the big numbers with their catalogs.

    Is it ever going to change?

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      It’s an obvious point. Actually, there may be some wisdom to at least letting a streaming service grow a little before hitting it with heavy royalty costs. That was the approach with internet streaming radio. Now, the smaller stations that couldn’t pay died after a limited growth window. At this rate, I don’t think anyone can survive, outside of Apple Music, Amazon, Microsoft, or (maybe) Spotify. It’s too cost-intensive, and this is a huge reason why so many investors are staying away from this space.

      Reply
      • Faza (TCM)

        I’d say that the main reason so many investors are staying away from this space is that the business model is crap.

        Seriously, though, Spotify could become profitable overnight if they trimmed the fat. Obviously, they’re not going to do so, because turning a profit comes a distant second to cashing big, fat checks out of a liquidity event – and growing fat grows the valuation, sadly. Unless they go down in flames first. We can only hope…

        There is actually no wisdom in letting streaming services grow before turning the screw – the business model is even worse for the music industry than for the services themselves. Not only is it always going to pay peanuts – it operates on the basis of a reverse health-club model, as it were (the punter always pays less than they would have if they paid by unit, or they have no incentive to subscribe in the first place) – it undermines other forms of monetizing recordings. I hope that last bit, at least, is not in dispute.

        Milking the streaming services for all they’re worth while they’re still flush with funding is the only sensible way of going about it. Until the business model undergoes a serious revision – specifically, a fundamental alteration of the pricing model to reflect consumption (IOW all-you-can-eat has got to go, unless it costs a small mint) – there is absolutely zero reason for the recording industry to underwrite these services.

        The fact that it’s being done nonetheless – despite the clear signals of how destructive it is – just demonstrates how clueless the industry has become.

        Reply
        • Remi Swierczek

          I call it UMG underwritten music industry suicide.
          There are specific names of geniuses under Sir Lucian who dismantled music business. Some of them, after putting the house on fire, jumped to Spotify!

          Reply

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