The CEO of streaming service Tidal, Andy Chen, has parted ways with the company barely two weeks after Jay Z took it over.
Chen (pictured) joined Tidal parent Aspiro AB in June 2013. Earlier this year, he helped guide the Norway-born company through a process which saw a Jay Z-fronted group acquire its operation for €50m ($56m).
That deal was finalised on March 30, the same day on which Jay Z and 15 other pop superstars were revealed as shareholders of Tidal at a glitzy New York press conference. The three major labels are also believed to have negotiated stakes in Tidal, which has – post-buyout – reportedly been valued at US $250m.
In a statement to media this weekend, Tidal announced that it had appointed a new Interim CEO, Peter Tonstad (pictured inset) in the wake of Chen’s departure.
Tonstad was CEO of Aspiro for two years prior to the arrival of Chen but was then moved to Chief Commercial Officer.
In what appears to be a peculiar dig at Chen, Tidal’s statement comments that Tonstad has a “better understanding of the [music] industry and a clear vision for how the company is looking to change the status quo”.
“Peter Tonstad has a better understanding of the industry and a clear vision… he is streamlining resources to ensure talent is maximised.”
Tidal statement
Tonstad has clearly agreed to wield the axe in his new position: Tidal’s statement adds that the exec is now “streamlining resources to ensure talent is maximised to enhance the customer experience.”
And therein lies the second part of Tidal’s latest shake-up: Jay Z’s outfit has confirmed that it has already laid off a number of positions – believed to be focused in Scandinavia and hitting around 12 executives.
The company said: “We’ve eliminated a handful of positions and refocused our company-wide talent to address departments that need support and cut redundancies.
“Tidal’s offices globally will remain and grow: we are already hiring for several new positions now. We’re excited about our future and what’s in-store for fans who want the best listening experience.”
In addition to its premium audio offering, Tidal is attempting to differentiate itself in the streaming market with exclusive video and audio content from the likes of Beyonce, Rihanna, Daft Punk and Jay Z himself – although these releases are showing a recurring habit of being uploaded to YouTube soon after appearing.
The platform, which does not offer a free tier to consumers beyond a month’s trial, is paying out 75% of its revenues to music rights-holders – slightly higher than Spotify and iTunes’ 70% commitment.
Tidal and its recently-quashed co-brand WiMP had attracted half a million paying subscribers around the world by the end of last year, with almost 400,000 of them coming via telco partnerships.
However, just 17,000 people had subscribed to Tidal’s high-end audio tier – in addition to 24,000 who paid for WiMP’s equivalent HD subscription.
Aspiro AB posted a net loss of 84.1m SEK (€8.9m) for its last calendar year, off the back of a 22% increase in net revenues to 303.2m SEK (€31.9m).
During Jay Z’s bidding process, Aspiro’s board of directors admitted that Tidal wasn’t profitable and “not fully funded for the coming 12 months”.
Tidal is now either live or set to go live in 37 countries around the world. Spotify is live in 58.Music Business Worldwide
