Square, Inc., the financial services company founded by Jack Dorsey, CEO of Twitter, acquires a majority stake in Tidal, the premier audio and video streaming service led by Jay-Z. Square pays $ 297 million in cash and shares for a “substantial majority stake” and says Tidal will operate independently with Square’s other businesses.
To put the obvious question in a thread on Twitter, Dorsey said: “Why would a music streaming business and a financial services business join forces ?!” His answer: to “find new ways for artists to support their work.” Just as Square has given new tools to sellers to make money, Dorsey says the company’s stake in Tidal will help artists find similar support in the new digital ecosystem.
Square acquires a majority 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 business and a financial services business join forces ?!
– jack (@jack) March 4, 2021
“Given what Square could do with Cash App for sellers of all sizes and individuals, we believe we can now work for artists to achieve the same success for them and for us,” Dorsey tweeted. ‘Ecosystems of tools for sellers and individuals on Square have created, and we will do the same for artists. We will work on completely new listening experiences to bring fans closer together, simple integrations for selling merchandise, modern tools for collaboration and new complementary revenue streams. ”
Tidal was founded in Norway in 2014 before being bought for a consortium of artists led by Jay-Z for $ 56 million the following year. The artists included Coldplay, Rihanna, Daft Punk and Madonna. The new owners have positioned Tidal in opposition to the streaming services of big tech, promising fans high quality audio and exclusive content.
However, Tidal experienced problems quickly, and was unable to secure exclusive content in the long run or attract subscribers to compete like Spotify. In 2017, the company secured a $ 200 million investment from Sprint (now merged with T-Mobile), but reported the following year that subscriber growth had stalled. At that point, the service apparently had about 3 million paying customers, compared to Spotify’s 20 million the same year.
Billboard reports that from 2020 Tidal was still behind on payments to right-holders, a problem that could possibly solve Square’s cash injection. According to financial documents submitted by parent company Project Panther Bidco in the UK, the company rose 13% in 2019 to $ 166.9 million in 2019, but losses also rose from $ 36 million to $ 55 in the same period. 19 million increased.
Now Tidal has another chance to reinvent himself. Talk to BillboardSquare’s hardware chief Jesse Dorogusker, who will serve as interim head of Tidal, said the company will develop new tools for artists as it continues to offer its streaming service to consumers. “We think the streaming service is an important part of it, and it is growing and will continue to grow,” Dorogusker told the publication.
As part of the deal, Jay-Z will join Square’s board. “I said from the beginning that Tidal was more than just the flow of music, and six years later it has remained a platform that supports artists at every point in their careers,” Jay-Z said in a press release. ‘Artists deserve better tools to help them with their creative journey. Jack and I have talked a lot about Tidal’s endless possibilities that have inspired me even more 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! ‘