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Report: TIDAL Struggling to Pay Indie Labels, Apple Talks Make Sense

The Jay Z-owned streaming service isn't providing streaming reports and payment to some indie labels.
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A Forbes article highlighting a report by Norwegian news outlet Dagens Næringsliv suggests that the Jay Z-owned streaming platform Tidal hasn't paid several musicians and record labels in its home country of Norway in months.

According to the report, some 1,000 record labels have experienced payment issues since January, claiming that Tidal has also failed to provide them with the necessary reporting of what songs have been played and the number of streams for each.

This news comes on the heels of pre-holiday reports that Apple is looking to acquire Tidal following a rumored attempt by Samsung to buy the streaming service earlier this year. Tidal currently has 4 million paying subscribers, a number that pales in comparison to the 15 million+ who currently call Apple Music home and the over 30 million who use Spotify. Reports suggest that Apple is most interested in the artist relationships and exclusives that Tidal has managed to secure over the past year, leaning heavily on its owner Jay Z for those connections.

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Tidal's failure to provide the up-to-date statistics and pay out streaming royalties to some labels doesn't necessarily signal cash flow issues, but rather the service has simply outgrown its reporting and accounting capabilities and thus is having a hard time managing the sheer amount of data it's collecting on a daily basis and then turning that raw data into reports. Managing massive volumes of data is a challenge for any industry in 2016, but is crucial in understanding how customers, in this case, Tidal users, interact with the service and allows artists and labels the ability to predict songs that may be gaining traction and thus put more marketing dollars behind them.

For its part, a Tidal representative responding to the Norwegian news report said that all of its bills had been paid and pinned any late payments and issues on Phonofile, the third-party company Tidal uses to issue their payments.

With so much talk of an acquisition over the past six months, it's easy to wonder if there is something to this latest report and that Tidal, which was purchased by Jay Z in 2015 for $56 million, is looking to unload its service before the administration requirements outpace its headcount. While a Tidal sale would certainly help Jay Z get that much closer to being a billion-dollar man, it won't do much for the artists and labels, especially those who are independent, using his platform.

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