Square, a payment platform founded by Twitter CEO, Jack Dorsey, has acquired a majority stake in Tidal, audio and video streaming service led by rapper, Jay-Z.
The financial company announced on Thursday that it is paying $297 million in cash and stock for a “significant majority ownership stake” and that Tidal will operate independently alongside Square’s other ventures.
Speaking about the new deal in a Twitter thread on Thursday, Dorsey asked a question;
Why would a music streaming company and a financial services company join forces?!
Square is acquiring a majority ownership stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders, and JAY-Z joining the Square board. Why would a music streaming company and a financial services company join forces?!
— jack (@jack) March 4, 2021
His answer was; to find “new ways for artists to support their work.” Just as Square gave sellers new tools to make money, Dorsey says the company’s stake in Tidal will help artists find similar support in the new digital ecosystem.
It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.
— jack (@jack) March 4, 2021
He then thanked Jay-Z for his wisdom, vision and leadership, saying;
I’m grateful for Jay’s vision, wisdom, and leadership. I knew TIDAL was something special as soon as I experienced it, and I’m inspired to work with him. He’ll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes. https://t.co/YRfYjcWJQx pic.twitter.com/xBtq2xfwue
— jack (@jack) March 4, 2021
Tidal, which offers subscribers early or exclusive access to music and products, was founded in Norway in 2014.
It was bought by Jay-Z, his singer wife Beyonce, and other artists acquired it in 2015 for $56 million. The group bought it in an effort to give artists greater power over the music business.
The new owners positioned Tidal in opposition to big tech’s streaming services, promising fans high-quality audio and exclusive content.
Tidal quickly ran into problems, though, by failing to secure exclusive content over the long term or attract subscribers to rival the likes of Apple, Amazon, Spotify and YouTube.
In 2017, the company secured a $200 million investment from Sprint (now merged with T-Mobile) but reports the following year said subscriber growth had stalled. At that time, the service was said to have roughly 3 million paying customers, compared to Spotify’s 20 million that same year.
Now, Tidal has another chance to reinvent itself. Speaking to Billboard, Square’s hardware lead Jesse Dorogusker, who will serve as interim head of Tidal, said the company would build out new tools for artists while continuing to offer its streaming service to consumers.
He expressed;
We think the streaming service is an important part of it, and it is growing and will continue to grow.
As part of the deal, Jay-Z will join Square’s board of directors. The rapper in a statement expressed;
From the beginning that Tidal was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers. Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about Tidal’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!
