After a year at the helm of the Tidal music streaming service, Jay Z has filed suit against the previous owners of the service saying he was given inflated subscriber numbers.
The legal action was first reported by Norwegian press as a “giant lawsuit” seeking $15 million from Scandinavian company Aspiro and major shareholders Norway’s Schibsted Media Group and Verdane Capital, a Stockholm-based private equity fund. Jay Z launched Tidal in the U.S. one year ago after paying Aspiro $56 million.
“It became clear after taking control of TIDAL and conducting our own audit that the total number of subscribers was actually well below the 540,000 reported to us by the prior owners,” the company said in a statement sent to USA TODAY. “As a result, we have now served legal notice to parties involved in the sale. While we cannot share further comment during active legal proceedings, we’re proud of our success and remain focused on delivering the best experience for artists and fans.”
In response to the news of the suit, Schibsted’s Anders Rikter told Norways’ BreakIt news agency that “we want to point out that it was a publicly traded company that was acquired, with what it means by the transparency of financial reporting. Otherwise we have no comments.”
Schibsted and Verdane Capital did not return USA TODAY’s request for comment.
Jay Z announced in February 2015 that he had made a bid for the Tidal and WiMP music services then owned by Aspiro through Project Panther Bidco Ltd., which is indirectly-owned by the musician’s S. Carter Enterprises. In March 2015, he relaunched Tidal at a celebrity press event in New York City with wife Beyonce and other musicians including Kanye West, Alicia Keys, Madonna, Chris Martin, Nicki Minaj Daft Punk and Usher on hand.
Involved artists reportedly each own 3% equity in Tidal with Jay Z having the remainder. The “artist-owners” list has grown to include Lil Wayne and Damian Marley.
Last week, Tidal announced that it has surpassed 3 million subscribers globally and that it had delivered 250 million streams of Kanye West’s The Life of Pablo in the first ten days of its availability. Among the 3 million members, nearly half (45%) pay $19.95 monthly for Tidal’s lossless CD-quality audio. Tidal also offers a $9.95 monthly subscription for high quality audio below that of CD-quality.
Over the past year, Tidal has added music videos as well as live-streaming of nearly four dozen live video events and concerts including a Wednesday performance in Atlanta by 2 Chainz and Lil Wayne (video on demand will land on the service on Thursday).
Some news reports suggest that Tidal is reportedly getting into the streaming of movies in the future, but the company had no official comment on that development.
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