When Jay Z launched Tidal last year, he did it on the idea that the streaming service would be the first of its kind to take care of artists with higher royalty payouts. After the official launch event, Jay even tweeted that Tidal was going to pay every artist, writer, and producer featured on the service a 75 percent royalty rate, which was higher than any other streaming service in the industry, at least according to Hov. Now, it appears that Hov and Tidal are in some serious hot water over their royalty system, as they're reportedly facing a $5 million class-action lawsuit from Yesh Music, LLC and John Emanuele from the band, the American Dollar.
The lawsuit, which was uploaded to Scribd here, claims that Tidal streamed 116 of the band's copyrighted songs without paying back any royalty payments in the process. The lawsuit was reportedly filed by the firm Garbarini Fitzgerald P.C. over the weekend in a New York Southern District court, according uploaded documents. The suit hints Tidal reportedly used faulty numbers to make payments to artists and may have undercut the money they owed to artists by as much as 35 percent. At this moment, the American Dollar's music is still available to stream on Tidal.
Tidal doesn't give out streaming stats to the public or even artists, according to the lawsuit. The band claims that they were expecting monthly reports on royalty payments and usage of every song, but nothing was ever sent and now they're suing for copyright infringement. The news of this lawsuit comes just days after a report surfaced that Samsung is in talks to buy Tidal from Hov, though nothing has been confirmed as of now. Tidal's success has been a true rollercoaster for the past year, but recently saw a bump in subscribers when Kanye West exclusively released The Life of Pablo on the service. We've reached out to Tidal on the lawsuit and will continue to update when more details come out.