As competition from rivals Spotify and Apple Music increases, the Jay Z-backed streaming service Tidal is said to be facing money problems, according to Norway’s Dagens Naeringsliv.
Tidal, which has its headquarters in Oslo, appears to have only six months left of working capital. The company reportedly lost 368 million NOK before tax in 2016, that translates to about $44 million U.S. dollars.
Jay-Z and other owners are said to have lost more than half a billion dollars since they bought Tidal. The rapper bought the streaming service about three years ago.
In January, Sprint bought a 33 percent stake in Tidal. The music streaming service was start producing content available exclusively to Sprint customers after the deal.
“This investment, along with other sources of funding, gives the group sufficient working capital for the next 12-18 months,” the company wrote in a report signed Juan Perez, according to Dagens Naeringsliv.
Perez is sports director of Roc Nation and Jay Z’s long time partner. The company reportedly said it expects to go to zero and then gain profitability midway through 2018.
“We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year,” a Tidal spokesperson said in a statement to International Business Times in response to the recent report.
Tidal, like Apple Music and Spotify, costs $9.99 a month. The company said last year it had 3 million subscribers, but others have disputed that number. Dagens Naeringsliv revealed earlier this year Tidal’s internal reports said it had 1.2 million users. Back in 2015, Jay Z tweeted that Tidal had reached 1 million subscribers, but the news Pandora earrings outlet claimed internal payments to record labels showed the number was about 350,000. Last year, Jay Z said the company he bought the streaming service from had also inflated the number of users.
Tidal Vs. Spotify, Apple Music
While Tidal user numbers are sketchy, the amount of subscribers is still much lower than its rivals. Spotify had more than 60 million subscribers as of July and more than 140 million active users as of June. Apple Music has more than 30 million subscribers. Apple CEO Tim Cook said last month Apple Music saw a 75 percent year-over-year increase in subscriptions.
Although Tidal has many famous stakeholders, including Beyonce, Kanye West and Rihanna, the service has lagged behind Apple Music and Spotify. Tidal also faces competition from other music streaming services like YouTube Red, Pandora and Amazon Prime Music, which is automatically available to Prime members.