Jay Z bought the music streaming company Tidal for $56 million last year, and since then he has struggled to turn a profit.
The idea behind Tidal was simple: the streaming company would offer high-fidelity sound, and would benefit from exclusive music and videos from artists like his wife, Beyoncé as well as friends like Rihanna and Kanye West, who are also co-owners. This service is offered at the premium price of $19.99, which is double that of any of Tidal’s rivals.
Although this idea may be simple, and it differentiates from its competitors, taking on the big boys of the music streaming industry, like Apple and Spotify, is a tough task that Jay Z may be learning the hard way.
According to Tidal’s holding company in Sweden (Bolagsverket) Aspiro AB which was purchased by Jay Z’s Project Panther Bisco last March, Tidal has posted a net loss of 239 million SEK ($28m) in the calendar year 2015.
This works out at around $2.3 million per month, this figure is more than double the net loss last year which was recorded at 88.9 million SEK ($10.5m).
These reports were not all bad news for Jay Z and Tidal, as its losses have increase so has its revenue, which has rose 30 percent on last year.
But Tidal is far from the only company losing profits in the streaming industry. Even the market leader Spotify – which has recently announced it has hit 40 million subscribers (compared to Tidal’s 4.2 million) – had a loss of €184.5m last year, and €165.1m the year before. Although like Tidal its revenue grew 80 percent in 2015 to 19 billion euros.
There is so much competition in the music streaming world, and with the likes of Pandora and Amazon adding new services and cheaper price points, it seems like it’s getting tougher and tougher. So whether Jay Z’s celebrity status and Tidal’s exclusive deals can be enough to keep them a float in the ever changing tide of the streaming wars, only time will tell.
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