Streaming service TIDAL recently announced it was hiring former Sony Music executive Richard Sanders to replace current CEO Jeff Toig, a former chief business officer at SoundCloud.
Sanders, the new CEO, accepted the leadership position at TIDAL, leaving his role as president and chief revenue officer of Kobalt Music Group. Sanders will be the fourth CEO that TIDAL has hired since 2015.
Bringing on a former chief revenue officer appears to be a push in a positive direction for Tidal as the company’s issues chiefly revolve around revenue.
TIDAL lost an estimated $28 million in 2015, a nearly threefold increase since 2014, when they reported loss of only $10 million. Royalties appear to be the company’s largest expense; it paid $35 million to labels and artists in 2015.
Large-scale streaming companies such as Spotify and SoundCloud also constantly battle paying fair royalties against meager revenues from users reluctant to invest in their higher service tiers. Subscription costs rarely scale proportionately to royalty expense increase, often turning the finances of streaming platforms further upside down.
TIDAL appears to be approaching this cash flow issue by creatively pursuing new cash flow-generating partnerships. Earlier this year, the company announced that it landed a $200 million deal with telecom giant Sprint. The cell phone carrier hopes to integrate TIDAL into its business model, directly competing with Apple Music and Google Play.
Kanye West, once a part-owner of TIDAL, reportedly left the company this summer over unpaid royalties from an exclusive streaming deal. Daft Punk, deadmau5, and Calvin Harris are assumed to still be major shareholders of the streaming platform.
Source: EDM Tunes
