You will be redirected back to your article in seconds

Tidal Exec Dismisses Layoff Reports as ‘Overblown’ at Variety Summit

Tidal senior executive Vania Schlogel said reports that the new streaming service was in trouble following a rocky launch were “very overblown,” as she spoke at Variety‘s Entertainment and Technology Summit on Thursday.

The music service was in the headlines recently after its major backer, rap superstar Jay Z, took to Twitter to hit back at reports that the company had undergone a series of layoffs and had failed to attract many customers.

In a stream of tweets last weekend, Jay Z, said the company had 770,000 subscribers, writing, “The iTunes Store wasn’t built in a day. It took Spotify 9 years to be successful…”

Schlogel defended her boss, saying he was responding to “click bait” media reports that exaggerated the challenges the company faces and the depth of its problems.

“Jay felt like I’m going to speak for myself and set the record straight,” she said, noting that Tidal has been in business for only a month.

Moreover, she argued that Tidal’s relatively small subscriber base is a problematic measuring stick. Unlike Pandora or Spotify, which offer both free and subscription services, users must pay to use the app. The service begins at $9.99 per month.

“Our business model, our viability as a business, is not driven by the number of app downloads,” said Schlogel. “It’s driven by the number of people who subscribe.”

She labeled the situation “very unfortunate,” but added, “there is an element of disparity between reality and perception.”

The layoffs at Tidal that spurred some of these stories were related to a decision to close a bureau in Sweden that had only three employees, she said, not a sign of cutbacks to come. “Overall, we’re focused on growth,” said Schlogel.

Panel moderator Todd Spangler, Variety‘s senior digital editor, asked Schlogel why Tidal CEO Andy Chen was ousted from the company in the midst of its launch. He was later replaced by Peter Tonstad,­ a former CEO of Aspiro Group, Tidal’s parent company.

“I’ll respect Andy Chen’s confidentiality,” said Schlogel. “I will say that we are excited to be working with Peter…he knows the ins and outs.”

At some point Tidal will find additional investors, Schlogel predicted, because licensing and technical costs of running a music streaming service are so high.

“We’re losing money hand over fist like every streaming service is….we’ll have to raise money,” she said.

Some elements of the streaming service do appear to be paying off. Tidal had success with a Jack White acoustic concert it streamed for users, and it’s planning a free concert in New York City next month for subscribers where Jay Z will play songs from his catalog that he rarely performs.

Tidal also made waves when Beyonce Knowles released a seven year anniversary video for Jay Z on the streaming service. The only downside was that the video, in which she performed “Die With You,” was widely pirated.

“The reality is [piracy] is going to happen,” said Schlogel. “It’s something we have to live with.”

More Digital

  • Evan Williams, Twitter founder (R) and

    Twitter Co-Founder Evan Williams Steps Down From Company’s Board

    Twitter co-founder Evan “Ev” Williams is stepping down from the company’s board, Twitter announced in a SEC filing Friday afternoon. Williams will depart from the board at the end of this month, according to the filing. “It’s been an incredible 13 years, and I’m proud of what Twitter has accomplished during my time with the [...]

  • Facebook Logo

    Facebook Shuts Down Controversial Ovano VPN App

    Responding to a continued backlash over its data collection practices, Facebook pulled the plug on its Ovano VPN app Friday. Ovano, which promised users an added level of privacy while using public Wifi hotspots, was used by Facebook for market research purposes. Facebook removed the app from the Google Play store Friday, and the company [...]

  • Smosh

    Smosh Acquired by Rhett & Link's Mythical Entertainment

    UPDATED: Smosh, the long-running YouTube comedy brand, has been acquired by Mythical Entertainment, the company formed by Rhett & Link, hosts of comedy show “Good Mythical Morning.” As first reported by Variety last week, Mythical emerged as the leading candidate to buy Smosh, which was left stranded after parent company Defy Media shut down without [...]

  • China Video Streaming Giant iQIYI Loses

    Chinese Video Giant iQIYI Loses $1.3 Billion in 2018

    Chinese video streaming firm iQIYI lost over $1.3 billion in 2018, as revenues and subscriber numbers ballooned. The deepening losses reflected ever higher spending on original content production. Announcing its first full-year financials since a March IPO that launched it onto the NASDAQ, iQIYI said that it lost $1.3 billion (RMB9.1 billion) last compared with [...]

  • Roku headquarters

    Roku Aims to Top $1 Billion in Revenue in 2019, Beats Holiday Quarter Earnings Expectations

    Roku wants to become a billion-dollar company in 2019, and invest more in its ongoing international expansion. The streaming-device maker told investors on Thursday that it expects to generate between $1 billion and $1.025 billion this year, and that international growth was one of its key investment areas for 2019. Roku made these announcements as [...]

  • Vice Media

    Vice Media Taps Joe Simon as Chief Technology Officer (EXCLUSIVE)

    Joe Simon has been tapped as chief technology officer at Vice Media. The newly created role will include oversight of data analytics, engineering, information technology, media operations, media technology, post production, and systems management. Prior to Vice, Simon spent three years as Encompass Digital Media’s chief operating officer. Previously he held the chief technology officer [...]

More From Our Brands

Access exclusive content