In an explosive story last year, TIDAL was placed at the center of a major alleged ‘fake streams’ scandal.
Norwegian financial newspaper Dagens Næringsliv said it had obtained an internal TIDAL company hard drive which proved the streaming platform’s play-counts for two major albums from 2016 – Beyoncé’s Lemonade and Kanye West’s The Life Of Pablo – had been artificially inflated.
DN reported: ‘Beyoncé’s and Kanye West’s listener numbers on TIDAL have been manipulated to the tune of several hundred million false plays… which has generated massive royalty payouts at the expense of other artists.’
TIDAL CEO Richard Sanders subsequently “rejected and denied” DN’s claims, but TIDAL opened an internal review into a potential data breach anyway. This review, announced eight months ago and undertaken by a third-party cyber security company, aimed to “aggressively [pursue] multiple avenues available to uncover what occurred”. No results have been publicly published to date.
In response to DN’s story, Norwegian collection society Tono, which represents around 30,000 songwriters, filed an official police complaint against TIDAL.
Today (January 14) brings big news: Dagens Næringsliv has revealed that Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) has begun an investigation into potential ‘fake streams’ at TIDAL.
Økokrim’s Chief Public Prosecutor, Elisabeth Harbo-Lervik, confirmed that Norwegian authorities launched this ongoing investigation – aiming to prove or disprove the suspicion of streaming volume manipulation within TIDAL – in the fall/autumn of 2018.
According Harbo-Lervik, Økokrim’s inquiries are “still in an early stage”. Yet at least four former TIDAL employees have been interrogated before a judge as part of the investigation so far, says DN, facing over 25 hours of questioning in total.
“We’re still waiting for TIDAL to offer information that will [tell us] anything about a possible manipulation.”
Elisabeth Harbo-Lervik, Økokrim
Of this group, reports DN, three people left TIDAL abruptly and simultaneously in the second half of 2016: two held Business Analyst roles at the platform, while the third was TIDAL’s Head of Business Intelligence – responsible for analyzing streaming figures.
DN claims that, while still employees of TIDAL in Norway, this trio recognized signs of manipulation regarding the relevant Kanye West and Beyoncé albums; the group then contacted a lawyer before informing TIDAL management about their findings, after which an internal meeting was held.
All three individuals subsequently resigned from TIDAL after signing what a DN source calls “the gold standard of confidentiality contracts”.
“[TIDAL] has previously stated that they consider themselves to be insulted by [DN’s allegations, so the company] should have a vested interest in getting information on the table that will [tell us] anything about a possible manipulation,” said Harbo-Lervik to DN (translated). “But we’re still waiting for them to offer this information.”
TIDAL’s lawyer, Fredrik Berg at the law firm Fend, commented: “TIDAL is at this time not a suspect nor has there been filed charges. We have an ongoing dialogue with Økokrim. It would not be right to share the contents of this discussion with the press.”
TIDAL parent Project Panther Bidco Ltd filed its annual accounts in the UK earlier this month (see below) for the year ended December 31, 2017. The Companies House document showed annual revenue growth of 13% to $116.8m, alongside a slightly reduced operating loss of $40.6m. (You can real TIDAL’s full 2017 accounts through here.)
According to DN’s original report into ‘fake streams’, at least 320 million TIDAL plays across both The Life Of Pablo and Lemonade in 2016 are believed to have been manipulated. DN interviewed individual TIDAL subscribers who said there were plays of these albums recorded on their accounts which they didn’t recognise.
DN further reported that it had gained access to record company royalty payment reports revealing that TIDAL paid Sony in excess of $4 million across April and May of 2016. Of this, Lemonade – a Billboard 200 No.1 album – accounted for an estimated $2.5 million.
“TIDAL is at this time not a suspect nor has there been filed charges.”
Fredrik Berg, Fend
Likewise, according to DN,in February and March 2016, TIDAL paid Universal a total of €3.2 million ($3.4m) . Of this, The Life of Pablo approximately delivered approximately €2 million ($2.1m).
DN hired the NTNU’s Center for Cyber and Information Security (CCIS) to forensically investigated the data it obtained on TIDAL’s plays. This report – which you can download in full here – concluded: “We have through advanced statistical analysis determined that there has in fact been a manipulation of the [TIDAL] data at particular times. The manipulation appears targeted towards a very specific set of track IDs, related to two distinct albums.”
