Now Tidal Is Reportedly Late on Payments to Labels
Tidal is struggling to make on-time payments to record labels and music distributors, multiple sources have reportedly told Norwegian newspaper Dagens Næringsliv. The Jay-Z-owned music streaming service is “behind with payments directly to the three major international record companies,” according to Music Business Worldwide’s translation. While some of DN’s sources were anonymous, two went on the record. “We have not been paid since October,” Frithjof Hungnes, CEO of Norwegian indie label Propellor Recordings, reportedly said. DN also quotes the CEO of Norwegian distribution company Phonofile, a subsidiary of Sony, who confirmed “delays in payments from Tidal.”
DN’s latest report follows last week’s bombshell investigation accusing Tidal of dramatically inflating play counts for its two highest profile 2016 album exclusives, Beyoncé‘s Lemonade and Kanye West’s The Life of Pablo. In additional follow-up reports, DN further claims that Tidal reduced the percentage of revenue it pays out to record labels from 62.5 percent to 55 percent without formally renegotiating terms. The paper cites an internal document apparently showing a 55 percent payout, a rate DN says puts Tidal in line with other services such as Spotify and Apple Music. Labels further distribute streaming revenue payouts to rights holders, including artists; if DN’s report is true, it could be a serious problem for Tidal, which has advertised itself as offering artists a better deal than competitors.
Fallout from the DN reports is mounting in Scandinavia, with Norway’s performance rights organization filing a formal complaint with authorities and its counterpart in Denmark calling for an independent audit of Tidal’s data. Tidal has denied the accusations, saying the data reviewed by DN was “stolen and manipulated” and denying the alleged adjustment to royalty payouts. Tidal has called the paper’s investigation “a smear campaign from a publication that once referred to our employee as an ‘Israeli Intelligence officer’ and our owner as a ‘crack dealer.’”
This week’s stories are just the latest in the somewhat adversarial relationship between Dagens Næringsliv and Tidal, which was originally created by a Norwegian parent company. In December 2017, DN reported that, despite a recent capital infusion from a deal with Sprint, Tidal had only enough cash to last six months. And back in January 2017, the paper published an investigation accusing Tidal of inflating its subscriber numbers by as much as 200 percent. (A line in this piece included the “crack dealer” and “Israeli intelligence” digs cited by Tidal in its recent rebuttal.)
When Digital Music News published a partial translation of the January 2017 DN report, the site noted that its own industry sources had reported late or missing Tidal payments, too. “We’ve heard lots of complaints from readers that Tidal is failing to pay on time,” Digital Music News founder Paul Resnikoff wrote at the time. “Or, not paying at all. That includes artists, as well as entire indie labels.”