Tidal Hit With $3.5M Royalty Suit

When it isn’t Kanye it’s Jay-Z hogging the news. Mr. Beyoncé, Shawn Carter is named in a class-action lawsuit claiming the Tidal music streaming service underpaid royalties to artists and infringed copyright, as Complex reports, and a second wave of top line execs have been fired according to overnight news sources.

First, a complaint filed February 27 in New York federal court named the hip-hop mogul's S. Carter Enterprises and two affiliates as defendants.

Jay Z's businesses allegedly created Tidal's library "by dumping all of the music from independent artists into the service without filing the proper notices," claimed John Emanuele of New York duo the American Dollar, along with Yesh Music, Emanuele's music publishing firm with bandmate Richard Cupolo. They added, "Independent artists are predominantly impacted by defendants' systematic infringement."

The complaint further accused Jay Z's organizations of "deliberately miscalculating the per-stream royalty rates."

The suit seeks between $30,000 and $150,000 for each of 118 alleged infringements.

Emanuele gripes in the Manhattan federal suit that “when defendant Shawn [‘Jay Z’] Carter purchased the Tidal Music Services in 2015, it claimed it would be the first streaming service to pay the artists.”

“Different owner, same game,” the suit snipes.

According to Pitchfork, Emanuele and Cupolo previously filed copyright lawsuits against televangelist Joel Osteen and the now-defunct streaming service Grooveshark.

The music streaming service is vigorously denying the accusations. A representative for Tidal responded to Pitchfork with the following statement:

TIDAL is up to date on all royalties for the rights to the music stated in Yesh Music, LLC and John Emanuele’s claim and they are misinformed as to who, if anyone, owes royalty payments to them. As Yesh Music, LLC admits in their claim, TIDAL has the rights to the Master Recordings through its distributor Tunecore and have paid Tunecore in full for such exploitations. Their dispute appears to be over the mechanical licenses, which we are also up to date on payments via Harry Fox Agency our administrator of mechanical royalties.

The entire catalogue in question streamed fewer than 13,000 times on TIDAL and its predecessor over the past year. We have now removed all music associated with Yesh Music, LLC and John Emanuele from the service. This is the first we have heard of this dispute and Yesh Music, LLC should be engaging Harry Fox Agency if they believe they are owed the royalties claimed. They especially should not be naming S Carter Enterprises, LLC, which has nothing to do with Tidal. This claim serves as nothing other than a perfect example of why America needs Tort reform.

The lawsuit couldn’t come at a worse time. The subscription-based music streaming firm launched in the Q2 of 2015 is reportedly in negotiations with Samsung and perhaps Google and Spotify who it’s hinted have expressed interest in acquiring the service and its 1M subscribers. A key selling point for Tidal in relation to competing with other streaming services such as Spotify and Pandora Radio is the exclusive content already available and expected for the future from the current artists who co-own the company, which includes Beyoncé, Rihanna, Madonna, Nicki Minaj, Alicia Keys, Lil Wayne, and Kanye West.

Samsung ponied up some $28Mto sponsor Rihanna’s latest album and tour. The 28-year-old singer is a partner in Tidal and is signed to Jay Z’s Roc Nation label.

Worse, MBW this morning reports Swedish news site Breakit naming CFO Chris Hart as having been fired - very likely over the platform's policy of not sharing its data with Nielsen Music in the US. Because of that policy, Kanye West exclusive The Life Of Pablo - a big moment in the history of TIDAL - failed to make any significant impact on the Billboard 200 chart last month. And, Norwegian newspaper Dagens Næringsliv reports that TIDAL COO Nils Juell was removed from his position in the past week.

The departures are the latest in a string of top level executive exits at TIDAL since Jay Z''s Project Panther Bidco bought the company last year.

- Sources: Page 6, Tidal, Pitchfork




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