New York (AFP) – Rap mogul Jay-Z has sued the original owners of his Tidal streaming service for allegedly inflating subscriber figures, in the latest twist to the company’s uneven relaunch.
Jay-Z last year bought Tidal from Aspiro, a tech company based in Norway and listed in Sweden, for 464 million Swedish kronor ($56 million) as he sought to enter the fast-growing streaming sector and challenge leader Spotify.
“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,” Tidal said in a statement Thursday.
“As a result, we have now served legal notice to parties involved in the sale,” it said, declining further details due to the litigation.
The lawsuit was first reported by the Norwegian business newspaper Dagens Naeringsliv, which said that Jay-Z’s business arm Project Panther Bidco sent a notice to several Aspiro board members.
It quoted a representative for one of the stakeholders, Norwegian media group Schibsted, as denying the allegations and saying that Aspiro presented accurate and transparent data.
Tidal described the allegedly inflated Aspiro data as a new sign of success for the service, which announced Tuesday, on the anniversary of Jay-Z’s relaunch, that it had three million subscribers.
“The growth in our subscriber numbers has been even more phenomenal than we’ve previously shared,” the statement said.
Aspiro, which still runs the WiMP streaming service available in five European countries, has focused on high-end audio, with Tidal using Flac files that are more data-intensive than those used by most rivals.
In its relaunch by Jay-Z, Tidal has cast itself as a streaming service geared toward artists and has since distinguished itself by providing exclusives as well as original video content.
But last year’s announcement was widely derided for its optics, with some of the richest names in music such as Madonna and Kanye West named as shareholders and appearing at a news conference to spread the message that artists need better payment.
Sweden-based Spotify, whose compensation structure has been criticized by some artists, remains by far the streaming leader, recently saying it had 30 million paying subscribers.
It is followed by Apple Music, which was launched in June as the tech giant saw a future in streaming and has quickly grown to 11 million subscribers.
Paris-based Deezer says it has six million paying subscribers but many are inactive and come through bundles with telecom operators, which are points of ambiguity in determining services’ numbers.