Jay Z 'I was conned into buying TIDAL': Accuses former owners of 'puffing up number of subscribers' after spending $56million buying streaming service

Photo: MediaPunch/REX/Shutterstock
Rapper and businessman Jay Z (seen in May 2015) spent a whopping $56 million when buying a music streaming service in 2015

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  Jay Z accuses former Tidal streaming service owners of 'puffing up number of subscribers' after spending $56million buying the company
Aspiro would go on to be revamped under the name Tidal
    Tidal said that 'the total number of subscribers was actually well below the 540,000 reported to us by the prior owners'

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    Papers have reportedly been sent to Norwegian media company Schibsted and a Swedish private equity group called Verdane Capital
Schibsted said: 'We disagree with the accusations in the letter and any potential claims'
    Rapper and businessman Jay Z spent a whopping $56 million when buying a music streaming service in 2015. Aspiro would go on to be revamped under the name Tidal, the New York Daily News reported. Norwegian media company Schibsted and the Swedish Verdane Capital have been accused of puffing up the amount of subscribers the service had. Tidal told the New York Daily News: '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. Schibsted representative Anders Rikter told Bloomberg: 'We disagree with the accusations in the letter and any potential claims.
'We would like to point out that the company was listed on the stock exchange with everything that entails regarding

Photo: Alberto E. Rodriguez/WireImage  Jay-Z is preparing to sue the former owners of music streaming Tidal, according to reports.

A year after buying a little-known music service and relaunching it as Tidal, Jay Z appears to be preparing to sue its original owners for misleading him about its performance.
Lawyers for the musician turned millionaire businessman has reportedly written to venture capital firm Verdane and Scandinavian media conglomerate Schibsted saying they “significantly” exaggerated the service’s number of users.
The two companies sold Aspiro, which ran the WiMP streaming service that became Tidal, to a consortium led by Jay Z that also included “artist-owners” Madonna, Beyoncé and Rihanna for $57m (£40m) in March last year. Jay Z is said to be seeking about $15m, according to Norwegian media.
Tidal said: “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 we’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, we’re proud of our success and remain focused on delivering the best experience for artists and fans.”

Photo: Getty Images

Aspiro would go on to be revamped under the name Tidal. A star-studded launch involved multiple celebrities, including (left to right) Jason Aldean, Jack White, Daft Punk, Beyonce, Regine Chassagne, Win Butler, and Alicia Keys

Norwegian business title Dagens Næringsliv reported that the key contention in the dispute is whether Tidal’s subscriber figures and financial performance were accurately communicated before the acquisition.

Tidal’s celebrity backing has helped it rapidly make a mark on the streaming industry. It recently announced it has 3 million subscribers and had delivered 250m streams of Kanye West’s latest album, which launched exclusively on the service in February. However, it still lags behind more established rivals such as Spotify.
Swedish tech publication Breakit reported that a spokesperson for Schibsted has said the company is “unsympathetic to the letter and any requirements ... we want to point out that it was a publicly traded company that was acquired, with what that means for transparency of financial reporting.”
The claims are proving controversial in Norway, where Aspiro was based, because the company was publicly traded and as such regularly reported its financial performance.
Apiro’s end-of-year report for 2014, published in February 2015, stated that the company’s net sales in 2014 were $37.2m at current exchange rates and its net loss for the year was $10.3m. They claim to have had 5000, 000 paying users at the end of 2014, including 35,000 on its HiFi tier.
Tidal has increased its 16 original artist-owners to 20, with Lil Wayne, Damien Marley, TIP and French band Indochine all recently signing up.
Tidal charges a monthly fee of $19.99 and has been mocked by some for being elitist, but rock musician Jack White has defended the company, stating it will help struggling artists.

Tidal has alleged: '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'

Schibsted told Bloomberg that Jay Z's holding company performed due diligence prior to saying yes to the transaction.

Rikter told the New York Daily News the letter did not include a financial figure.

Media in Norway had said that Jay-Z was seeking $15million, the Guardian reported. 

Verdane Capital did not immediately return an email message seeking comment from DailyMail.com.

This week, it emerged that Tidal has 3million subscribers, compared to its competitors Spotify and Apple Music having 30million and 11million, respectively, Time reported.  

Courtesy: Guardian

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