Despite its celebrity owner, Tidal always seemed to be in an uphill battle against the deep pockets of Apple, Google, and Amazon, and the big funding of Spotify. Now comes multiple reports that the music streaming service will run out of cash by the middle of next year unless things take a dramatic turn upwards. The company reportedly ran up $44 million in loses last year alone.
Since Jay-Z bought to the company with great fanfare a couple of years ago, Tidal has struggled to gain subscribers, even though it featured a number of exclusive releases that temporarily made the acquisition look like a good bet. The company has claimed it has as many as 3 million paid subscribers, but industry sources think it’s more around the one million mark, which is a substantial hit on revenue.
Last year Sprint made an investment of around $200 million in the service, and there was much speculation that it would eventually acquire it. That hasn’t come to pass though, as more and more telecom companies have decided that music isn’t a game they’d like to play as that part of the industry begins to consolidate.
Jay-Z has reportedly made the rounds with several companies and investors looking for additional funding or even a buyout, but no offers have been forthcoming.
Tidal now has a $9.99 per month tier that’s nearly identical to every other streaming network, but also boasts a $19.99 per month high-resolution tier that features FLAC and ALAC files. This tier is preferred by many audiophiles, and can be seen in use at demonstration booths at any hi-fi show. The problem is that there just isn’t enough potential subscribers in that group to move the revenue needle, and for the most part, the average subscriber hasn’t cared enough about audio quality to pay the extra $10 per month.
Music streaming is increasingly becoming an industry of giants, as smaller companies fall by the wayside. Considering how draining music licenses can be on revenue, that’s not a shock, but don’t be surprised if we’re down to only 3 or 4 choices soon.