Square and Tidal’s Business Deal
Square announced today that it would be buying a majority stake in the music streaming startup company. The fintech business app is paying a reported $297 million in cash and stock to own a significant majority of the music streaming startup company.
Jack Dorsey, founder and CEO of the $102.06 billion fintech business app, said in response to the deal, “It comes down to one simple idea: finding new ways for artists to support their work... New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
Regarding the deal with Square, Jay-Z added, “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…”
The music streaming startup company is available in 56 countries, with more than 70 million songs and 250,000 videos. It is expected that the music streaming startup company will use the financial services provided by the fintech business, enabling artists to receive direct payments from fans. As a result of the deal, Jay-Z will join the board of directors for the fintech business app.
Overview of Tidal
The music streaming startup company was founded in 2014 and featured several big musicians as part owners of the company, including Madonna, Kanye West, Nicki Minaj, Chris Martin, and Rihanna, among many others. Their ownership details are not public. Jay-Z purchased the streaming service in 2015 for $56 million.
Tidal has had a difficult road as it competes against streaming giants like Spotify, Apple, Google, and Amazon. After the purchase in 2015, it was revealed that in the same year, the startup company had lost $28 million. In 2017, Jay-Z sold a 33% stake of Tidal to Sprint, which was later acquired by T-Mobile. Jay-Z eventually bought back those shares. However, in that same year, the startup company only had 3 million subscribers, compared to tens of millions of subscribers for Spotify and Apple Music.
Now that Square will be the majority stakeholder in Tidal, there is an opportunity for the fintech business app to breathe new life into the company.
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.