Tidal Posts Huge Loss in 2015

In the year rap mogul Jay-Z took control of Tidal, the music-streaming service more than doubled its net loss, burning cash at a rapid rate and testing the depth of its owner’s pocket.

The Wall Street Journal reports Aspiro AB, Tidal’s Swedish holding company that Jay Z and a group of other musicians bought in early 2015, recorded a net loss of 239 million Swedish kronor ($28 million) last year, according to a legal filing. That compared with a net loss of 88.9 million Swedish kronor in 2014.

Over the same period, revenue rose 30% to 402 million Swedish kronor from 309 million kronor.

The spill of red ink at Aspiro illustrates the challenge the music-streaming service faces in competing with much-larger rivals such as Spotify AB, Apple Inc. ’s Apple Music and Google’s parent Alphabet Inc. Despite significant marketing efforts, Tidal is stuck between consumers reluctant to pay for tunes they can easily access for free, and record labels, which often are demanding upfront payment for copyright fees.

A person familiar with the matter said the financial statement doesn’t paint a complete picture of the situation at Tidal because it doesn’t reflect all U.S. revenue and financing.

The financial statement, which Aspiro filed with Sweden’s company-registration office Bolagsverket, describes a company straining to pay its bills. Short-term debt to suppliers shot up to 158 million Swedish kronor last year, from 34.7 million kronor in 2014, according to the document.