Jay Z Files ‘Giant Lawsuit’ Against Former Tidal Owners

Breaking: Jay Z Files 'Giant Lawsuit' Against Former Tidal Owners
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The music streaming industry has become increasingly competitive over the years, with several companies vying for the top spot. One of these companies is Tidal, a streaming service that was acquired by a group of musicians, including Jay Z, in 2015. However, recent reports suggest that the rapper is now filing a lawsuit against the former owners of Tidal, claiming that he was given misleading information about the company’s subscriber numbers.

According to a report by Swedish news publication, Breakit, Jay Z claims that the worldwide subscriber numbers he was given at the point of sale were inflated. Additionally, various statements relating to the condition of the business were allegedly exaggerated, leading the rapper to take legal action. It’s worth noting that this isn’t the first time that Jay Z has expressed dissatisfaction with Tidal’s performance. He reportedly wrote several letters to the previous shareholders of Tidal and the owner of Aspiro (Tidal’s parent company), Schibsted ASA, expressing concerns about the inflated user numbers when his finance company, Project Panther Bidco, bought the service last year for a reported $57 million.

However, Schibsted Communications Manager, Anders Rikter, told Dagens Næringsliv that the company was “unsympathetic” to those letters and explained to Breakit that transparency in financial reporting was upheld, which is a requirement of a publicly traded company. The fact that Jay Z is now taking legal action suggests that he was not satisfied with the response he received from the previous owners of Tidal.

So why has Jay Z decided to take the legal route now? The suit isn’t a complete surprise and does follow a string of written letters, but if the service was doing well and growth was accelerating, there would be little incentive to go down the road of a lengthy court battle. All of which suggests that Tidal may be struggling. Perhaps the numbers aren’t as solid as they appear. Earlier this week, Tidal announced its three millionth subscriber, a major milestone albeit a self-reported one. Regardless, it falls way behind Spotify’s 30 million and Apple Music’s 11 million.

But a bigger issue could be lurking in the fundamentals. Due diligence is the chore of the buyer, though skeletons sometimes surface after the deal is signed. It’s possible that Jay Z and his team did not do enough research before acquiring Tidal, and are now paying the price for their oversight.

In response to the lawsuit, Tidal has released a statement saying that the growth in their subscriber numbers has been even more phenomenal than they’ve previously shared, and that it became clear after taking control of Tidal and conducting their own audit that the total number of subscribers was actually well below the 540,000 reported to them by the prior owners. As a result, they have now served legal notice to parties involved in the sale. While they cannot share further comment during active legal proceedings, they remain focused on delivering the best experience for artists and fans.

It remains to be seen how this lawsuit will play out and what impact it will have on Tidal’s future. However, it serves as a reminder of the importance of due diligence in business deals, and the potential risks of relying on inflated numbers and exaggerated statements.

 

(Image by Ultra5280, Attribution 2.0 Generic, cc by 2.0)

2 Responses

  1. Remi Swierczek

    Dear Jay Z,
    Again your music observing, humble, inventor asking you to STOP your hopeless all inclusive streaming monetization games! USE YOUR POLITICAL POWER and get new “fair use act” before Obama goes away. Next day music will be locked in virtual walls and over 100,000 Radio stations, few screwed up streamers and about 10 million public places will be converted to music stores.

    Music has more intrinsic value than all digital advertising which is fueling blinded by ads Google music killer.

    $200B music industry is no brainer and will triple Google by 2025.

    We just have to see Larry Page so he can exit digital medieval and grab the biggest MOONSHOT of his life.
    It will be VERY FAIR to thousands of creators and Google shareholders.

  2. Anonymous

    …because it’s already April 1 in Sweden? 🙂