Tidal, the music-streaming service led by industry mogul Jay Z, was hit with a class-action lawsuit Monday accusing it of deceptive marketing practices.
The company has had a rocky year, and an even rockier launch of its first big exclusive: an album fromKanye West, which ended up not being that exclusive after all.
West had said that his album, “The Life of Pablo,” would be available only from the premium streaming site, which promises to deliver higher quality video and audio than its competitors. It also has no free tier, unlike many other music-streaming services, which has made it attractive to artists who are upset about the small sums they make per play over competing sites.
But, as it turned out, West’s album was soon made available on other services, including Spotify,Pandora and Apple.
The lawsuit says that what West did amounts to a sort of bait-and-switch that led millions of users to hand Tidal their personal information and believe that they could not get the album anywhere else.
According to a copy of the lawsuit that was shared with The Washington Post: “By the time Mr. West changed course and broadly released ‘The Life of Pablo,’ the deceptive marketing ploy had served its purpose: Tidal’s subscriber numbers had tripled, streaming numbers were through the roof, and Tidalhad collected the personal information, credit card numbers, and social media information of millions of deceived consumers. As a result, Tidal’s valuation – the lifeblood of any new start-up – soared.”
The complaint estimates that the value of that information is worth $84 million (roughly Rs. 557 crores) to Tidal. It also estimated the company’s value increased by at least $60 million (roughly Rs. 398 crores) when subscribers came in droves to Tidal for the “exclusive” album.
Tidal touted “The Life of Pablo” as a huge hit for the company, saying that it had been streamed 250 million times in the first 10 days after its release, according to a Tidal news release.
The fan who filed the suit, Justin Baker-Rhett, said that he subscribed to the service immediately after seeing West’s announcement about releasing only on Tidal. He started streaming it the same day. But, the complaint says, if Baker-Rhett had known that other platforms would soon carry the album, he would not have paid the $9.99 monthly fee.
Baker-Rhett canceled his subscription once he found out “The Life of Pablo” was not exclusive to Tidal.
The complaint asks that Tidal reimburse anyone who signs on to the class-action lawsuit, erase data it collected from those subscribers and stop all “monetisation efforts that rely on their personal data.”
Neither Tidal nor representatives for West immediately responded to a request for comment.
Those filing the lawsuit also think that West promoted the Tidal deal as an exclusive with the full knowledge that the album would be released on other sites. “His intent will be one of the key parts of the lawsuit, deposition is going to be pivotal, at the end of the day being able to demonstrate he knew what he was doing, will be one of the critical issues,” said Jay Edelson, chief executive and founder of Edelson PC, the firm handling the case.
The firm has handled prominent privacy lawsuits involving tech titans including Google, Apple andAmazon.com. (Amazon founder Jeffrey P. Bezos owns The Post.) And, Edelson said, he believes this case revolves around privacy matters as well.
“Start-ups make money by collecting private information for people,” he said. “That’s one of the big issues of the lawsuit: Can you trick people into giving up all this personal information, boosting your valuation and leave them holding the bag.”