Update 7/6/17 at 12:00 p.m EST: A source close to Kanye West has confirmed that Tidal's exclusivity rights have been terminated based on what is alleged to be Tidal's failure to honor its financial obligations.
Just as JAY-Z’s exclusive Tidal album release 4:44 was certified platinum four days after its release, it appears there may be rancor among at least one of the streaming service’s artist-owners. Reports surfaced over the holiday weekend that Kanye West, one of Tidal’s initial 16 artist-owners, is planning to break his exclusive contract with subscription-based DSP and allow future releases to appear on other music streaming platforms.
According to a report that originally appeared on TMZ, West claimed that Tidal owes him “more than $3 million” after his album The Life of Pablo allegedly “resulted in 1.5 million new subscribers to Tidal, for which he was supposed to get a bonus but the company hasn't paid.” The report also claimed Tidal failed to compensate Kanye for his music videos.
Tidal’s position, according to the report, is that West failed to deliver the videos he was required to by contract and he is still beholden to his agreement. While no lawsuits have yet been filed, it appears both sides' lawyers are engaged in the dispute and ramping up for what would seem an inevitable legal showdown between the superstar rapper and the streaming service that has yet to catch-on widely with consumers.
Tidal declined to comment for this story and West's press and legal reps did not return requests for comment at press time.
In January 2015, JAY-Z made a $56 million offer for the Swedish technology company Aspiro and its WiMP streaming service. By March 2015 he had renamed it Tidal and hosted a splashy launch featuring star power artist-owners which included Beyonce, West, Daft Punk, J.Cole, Jason Aldean, Coldplay, Usher, DeadMau5, Calvin Harris, Jack White and Nicki Minaj among others.
Since then, the company has struggled to attract and retain paid subscribers during a period in which streaming now accounts for more than half of music industry revenues. At last unofficial count, the service had an estimated one million paid users, far behind market leaders Spotify and Apple Music (50 million and 20 million, respectively).
This past May, Tidal lost its third chief executive in two years with the departure of Jeff Toig, who became CEO in January 2016 when he replaced interim CEO Peter Tonstad, who took over for Tidal's original chief exec Andy Chen.
In January, however, Tidal boosted its funding selling off a 33 percent stake in the company to Sprint for $200 million while giving it access to the telecom company's 45 million customers. That deal helped buoy JAY-Z’s new album 4:44 which was certified platinum four days after its release thanks to a promotion sponsored by Sprint allowing consumers to download the album for free after submitting an email address and promotional code.
All of which means JAY-Z, the face and name behind Tidal, has masterminded two consecutive releases (2013's Magna Carter, Holy Grail with Samsung) with corporate partners which have supported massive sales numbers before his albums even hit the streets. Those kinds of deals may not be easily available to Tidal’s other artist-owners, who in the wake of Hova's riches may be wondering much like Kanye if their music is being distributed as widely as possible and if they are maximizing their returns as well as JAY-Z.
Those artists, though, may not have the personal relationship JAY-Z and Kanye have had and which seemed to culminate with the duo's 2011 joint studio album Watch the Throne which was followed by a tour.
On Jay's new release, however, the song "Kill Jay Z" points to a schism between the two MCs with lyrics that make mention of Kanye receiving a supposed $20 million advance for 2016's Saint Pablo tour presumably from Jay Z's Roc Nation which he seemed to imply was undeserved. "But you got hurt because you did cool by 'Ye," the lyrics say. "You gave him 20 million without blinkin'/He gave you 20 minutes on stage, f**k was he thinkin'?"
The lyrics could be a reference to the Saint Pablo tour getting cut short with 21 shows remaining. This came shortly after an erratic performance in Sacramento where Kanye ranted about JAY Z not calling him among other things. Not long after the show West was hospitalized for reported exhaustion.
A source close to the situation says the the $20 million line from "Kill Jay-Z" had nothing to do with tour advances, saying Roc Nation doesn't structure its deals that way.