TIDAL sued over copyright infringement, royalty issues

Back when TIDAL came out, Jay Z claimed the site would be artists first and pay the best rates of any streaming service. Despite the 75% going to artists claim, some artists are alleging this is not the case at all. In fact, TIDAL has been hit with a lawsuit to the tune of five million dollars by Richard Cupolo and John Emanuel. The two, who perform under the name The American Dollar, are seeking somewhere between thirty thousand and one hundred fifty thousand dollars on what they claim are 118 copyright infringements by TIDAL. Cupolo and Emanuel have filed lawsuits before, including one against Grooveshark, however, they weren't the only ones to file against that site. In fact, we reported on the Grooveshark story that "after a lengthy lawsuit by UMG, Warner and Sony it was determined in a federal court that Grooveshark never secured music licenses for a vast majority of those songs. To avoid a multi-million dollar lawsuit, Grooveshark's parent company, Escape Media settled with the record labels."

Despite Jay-Z's comments in hyperbolic tweets, 75% of the royalties do not in fact go to the artists. Last year, a TIDAL executive confirmed that the 75% in question mostly goes to record labels. Last year in The Hollywood Reporter, Vania Schlogel, TIDAL's chief investment officer, had to clarify by explaining "The industry standard royalty rate...is 70% (roughly 60% to record labels, roughly 10% to artists via publishers). Tidal pays 62.5% and 12.5%."

In other words, TIDAL pays 2.5% more to artists and 2.5% more to record labels, but artists receive 12.5%, not 75%. Hardly one year ago, both Death Cab's Ben Gibbard and Mumford and Sons were dissing the site, complaining they only care about high profile big money making acts, rather than the middle class or indie musicians. Whether the suit holds water or not, ironically the claims against TIDAL are more or less the same as the class-action lawsuit against Spotify, filed by David Lowery on behalf of potentially hundreds upon hundreds of artists. Namely, that TIDAL “created its now 25 million track library by dumping all of the music from independent artists into the TIDAL Music Service without serving NOIs,” which is a Notice of Intent to Obtain Compulsory License.

TIDAL has issued a statement regarding the matter.

Statement from TIDAL
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.

Note the flippant dismissal that the band's entire catalog has "only" been streamed fewer than 13,000 times. I thought TIDAL was meant for artists of all sizes. Apparently, some artists are more important than others.

It remains to be seen what will transpire here, but it is interesting to note even artist-run (or artist-backed) sites aren't looking much better than the Big Tech ones.

The lawsuit against TIDAL comes at a time when some sources are claiming Samsung is in talks to buy the company.