byÂ Charlotte Hassan
Today, Breakit â€” a Swedish news publication â€” reported that Jay Z is filing a â€˜giant lawsuitâ€™ against former Tidal owners.
According to the report, the rapper claims that the worldwide subscriber numbers he was given at point of sale were misleading. Â Additionally, various statements relating to theÂ condition of the business were allegedly exaggerated. Â As a result of the deceptive information, Jay Z is taking legal action.
Jay Z started off byÂ writing several letters to the previous shareholders of Tidal and owner of Aspiro (Tidalâ€™s parent company), expressing dissatisfaction with inflatedÂ user numbers when Project Panther Bidco (Jay Zâ€™s finance company) bought the service last yearÂ for a reported $57 million.
Anders Rikter, Schibsted Communications Manager,Â told Dagens NÃ¦ringsliv that the company was â€œunsympatheticâ€ to those letters, and explained toÂ BreakIt that transparency in financial reporting was upheld. Â For starters, this was a requirement of a public traded company.
Why wouldÂ Jay Z take the legal route now? Â TheÂ suit isnâ€™t a complete surprise and does follow string of written letters, but if the service was doing well and growth was accelerating, there would be little incentive to go down the road of a lengthy court battle. Â All of which suggests thatÂ Tidal may be struggling.
Perhaps the numbers arenâ€™t as solid as they appear. Â Earlier this week, Tidal announced its threeÂ millionth subscriber, a major milestone albeit a self-reported one. Â Regardless, it falls way behind Spotifyâ€™s 30 million and Apple Musicâ€™s 11 million.
But a bigger issue could be lurking in the fundamentals. Â Due diligence is the choreÂ of the buyer, though skeletons sometimesÂ surface after the deal is signed.
Update: Tidal have directly reached out to me with a statement on the matter.
It reads, â€We are excited that one year after TIDAL launched, we have surpassed 3 million subscribers globally. The growth in our subscriber numbers has been even more phenomenal than weâ€™ve previously shared. 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. 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, weâ€™re proud of our success and remain focused on delivering the best experience for artists and fans.â€