UPDATE: Tidal has issued a statement in response to the lawsuit. You can read it in full via Fader below.

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 main compositions in question were release by The American Dollar and their entire catalogue 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."

Jay Z's streaming site Tidal promised higher royalties to artists who allowed their music to be featured on the site, and was initially touted as a more musician-friendly alternative to Spotify. But it looks like the company may have dropped the ball somewhere along the way, because the service faces a hefty $5 million lawsuit over unpaid royalties.

A band named The American Dollar claim Tidal streamed 116 of the group’s songs on its site, but they have yet to receive a single check in the form of a royalty payment, according to claims in this court filing as posted to Scribd (via Complex).
The 'Yesh Music v. S Carter Enterprises' class action complaint also alleges the company fudged its own numbers, in an attempt to pay artists up to 35 percent less than they’re actually owed.

The group also claims they didn't received a single monthly report — which would break down streams and how much money they were owed — from the site and are currently suing for copyright infringement.

Tidal's main appeal lies in its exclusive content provided by big name artists -- usually those who have invested big bucks in the company themselves. Kanye West released his latest album The Life of Pablo to stream on the site, and it’s not commercially available anywhere else. This proved good business for Tidal, which saw a major uptick in subscribers (from 1 million users to 2.5 million), according to a report from TMZ.

On the other hand, the site is not without its faults, either: A major gaffe on Tidal's end lead to an early leak of Rihanna's highly anticipated eighth album Anti. The album wound up on fellow streaming sites like Apple Music and Spotify, a week later.

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