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Beef Of The Week #404: DN v Tidal

By | Published on Friday 18 May 2018

Tidal

I assume, like me, you spend 62% of every waking hour of your life thinking about streaming services. That’s just normal.

Over the last year, you can’t fail to have noticed that an ever decreasing amount of that thinking time is taken up by Tidal. To the point that the only time you thought about Tidal was when you wondered why you didn’t think about Tidal anymore. You might even have had to check that Tidal is still going. It is. And I know this, because in the space of a few days it’s suddenly started occupying my brain again.

This is largely thanks to Norwegian business newspaper Dagens Naeringsliv, which has suddenly redoubled its efforts to scrutinise the company. Tidal, of course, was originally founded in Norway, before being bought by Jay-Z in 2015, and still maintains its base in the country, hence the continued attention from local media.

Everything actually started kicking off last week, when DN accused Tidal of inflating listening figures for two of its exclusive albums, Kanye West’s ‘The Life Of Pablo’ and Beyonce’s ‘Lemonade’ – the latter of which remains only available for streaming on Tidal.

The paper said that it had got hold of internal Tidal data, which confirmed the massive streaming counts that Tidal had reported shortly after those records were released. However, when it started phoning round some of the most prolific listeners – prolific according to the figures, that is – many said that they hadn’t played those albums anything like that much.

With anecdotal evidence that all was not as it seemed, DN handed over the data to academics at the Norwegian University Of Science And Technology. After poking around a bit, the boffins concluded that the data had indeed been tampered with.

Tidal, for its part, denies this all entirely. In fact, it says that the newspaper illegally obtained the data, and then did some manipulating of the figures itself. It accused DN of a “smear campaign”, referencing derogatory comments it had previously made about its COO Lior Tibon and owner Jay-Z.

Prior to DN publishing its report, it seems that Tidal’s lawyers had already tried to head it off. However, it still went public with its accusations.

They’re pretty serious accusations too. These inflated numbers don’t just serve to boost egos and present a rosier picture of life at Tidal. Due to the revenue share basis on which streaming services are licensed, if Kanye and Beyonce get more plays, they also get more of the money. If they get a higher proportion of royalties, all other artists get less.

If all those other artists are getting less because two artists had their plays massively inflated – aside from that contradicting Tidal’s original pitch that it was the ‘artist friendly’ streaming service – you are also basically into the realms of accusing a company of fraud.

So you can see why Tidal might want to defend itself quite so forcefully. And so it did. “This is a smear campaign from a publication that once referred to our employee as an ‘Israeli intelligence officer’ and our owner as a ‘crack dealer'”, it said. “We expect nothing less from them than this ridiculous story, lies and falsehoods. The information was stolen and manipulated and we will fight these claims vigorously”.

Given the severity of the claims, it seemed inevitable that the police would become involved at some point. And this week, Norwegian collecting society Tono filed an official police complaint against Tidal off the back of DN’s claims.

According to another Norwegian news provider, the country’s version of The Local, Tono says that last week’s claims are “strong” and “apparently credible”, but also notes Tidal’s counter allegation that it was DN journalists who actually manipulated its data. Tono director Cato Strom said in a statement: “We have to protect the interests of the rightsholders for whom we work, but we also believe that a complaint is in the interest of Tidal which says the data has been stolen and manipulated”.

Therefore, it has urged the Norwegian National Authority For Investigation And Prosecution Of Economic And Environmental Crime to launch an investigation.

Danish collecting society Koda is also known to be investigating last week’s reports, starting with an audit of the data it received from Tidal. It’s thought that other European societies or rights owners could follow suit.

Of course, in order to assess if rightsholders are being paid less than their rightful share, there needs to be money to count in the first place. And following last week’s accusations, various labels then spoke to DN to complain that rather than just getting a little less than they should, Tidal payments seem to have dried up entirely.

In a new article published this week, DN reported that Tidal was behind with payments to many labels, including all three majors, by as much as six months.

Propeller Recordings boss Frithjof Boye Hungnes said: “We have not been paid since October. The agreement is that we will be paid monthly. People are talking about withdrawing, I think there’s a pretty hostile atmosphere”.

These new complaints also tie in with another DN article from December last year, in which it claimed that Tidal only had enough money to see it through to this summer. And, well, the sun is out. Though Tidal denied that DN report when it was published too.

Though on the issue of late payments, Tidal has not yet commented. But this morning it did return to firmly refute those accusations of manipulating track play numbers once again. In a new statement, current CEO Richard Saunders attempted to turn attention back to how DN came to gain access to its data.

“We reject and deny the claims that have been made by Dagens Næringsliv”, he says. “Although we do not typically comment on stories we believe to be false, we feel it is important to make sure that our artists, employees, and subscribers know that we are not taking the security and integrity of our data lightly, and we will not back down from our commitment to them”.

He goes on: “When we learned of a potential data breach we immediately, and aggressively, began pursuing multiple avenues available to uncover what occurred. This included reporting it to proper authorities, pursuing legal action, and proactively taking steps to further strengthen our stringent security measures that are already in place”.

“Additionally, we have engaged an independent, third party cyber-security firm to conduct a review of what happened and help us further protect the security and integrity of our data”, he concludes. “We are proud of the hard work, devotion to our artist driven mission, and tremendous accomplishments of our over 100 employees in Norway and 50 more in the United States. We look forward to sharing with them, and all of our partners, the results of the review once completed”.

So that all sounds pretty firm and action-packed. Although it doesn’t answer the now equally important question about Tidal’s standing financially. Which is possibly bothering unpaid labels more, however dramatic DN’s data claims may have been.

If DN is right that Tidal is about to run out of money, can it be saved? A sale to anyone but another streaming firm seems unlikely at this stage, and the fact that US tel co Sprint owns a 33% stake now complicates any potential deal. The company may have always been a minor player in the streaming market overall, but if it were to shut down entirely, that would be quite a significant moment in the history of streaming.



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