A new report claims Tidal has some serious money issues and its user growth rate is stagnant. Norway’s Dagens Næringsliv has stated that the streaming service’s money problems are so serious that the company may be out of cash within 6 months. According to the report, Tidal lost the equivalent of $44 million last year and, since then, its subscriber growth rate has stalled to a halt.
In January of this year, Sprint and Tidal announced an agreement which would see the carrier purchase a 33 percent stake in the streaming service, which, at the time, was said to be enough to keep the service running for a further 12 to 18 months. Now, according to DN’s report, it appears those estimates were pretty accurate. DN suggests that Tidal will be out of cash by May of next year, 16 months after the cash injection from Sprint. However, despite all of this, the company has previously stated its goal of achieving profitability by mid-2018 which, if still possible, would certainly be a big milestone in the company’s history. In order for this to happen, though, the company needs a big enough subscriber base, a figure that has reportedly remained stagnant since the beginning of the year and one that hasn’t been reported on for over 18 months – The company has been plagued with accusations of inflating the numbers significantly. Tidal last reported a subscriber base of 3 million, but DN later found that this number sat closer to the 1 million mark. For comparison, Spotify has over 140 million active users, of which 60 million are premium subscribers, while Apple Music’s subscriber numbers sit at over 30 million. Not only this, but Tidal’s competition could become much stronger in the near future if Spotify is successful with its IPO plans.
The music streaming service lost $581 million last year, but its overall revenue sat at $3 billion. However, once the company goes public, Spotify is expected to reach profitability and, with an increased cash flow, the company’s speed of growth is expected to increase due to bigger investments in the service. Tidal is currently denying any problems, with a spokesperson for the company stating that they “have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year.” With the competition set to only get tougher, though, it’ll remain to be seen what the long-term future holds for the streaming service