Jack Dorsey’s Square, Inc. is buying a majority stake in Jay-Z’s streaming service Tidal

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Square, Inc., the financial services company founded by Twitter CEO Jack Dorsey, is acquiring a majority stake in Tidal, the high-fidelity audio and video streaming service led by Jay-Z. Square is paying $297 million in cash and stock for a “significant majority ownership stake” and says Tidal will operate independently alongside Square’s other ventures.

Asking the obvious question in a thread on Twitter, Dorsey said: “Why would a music streaming company and a financial services company join forces?!” His answer: 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.

“Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us,” tweeted Dorsey. “Square created ecosystems of tools for sellers & individuals, and we’ll do the same for artists. We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams.”

Tidal was founded in Norway in 2014 before being bought by a consortium of artists led by Jay-Z the following year for $56 million. Artist-owners included Coldplay, Rihanna, Daft Punk, and Madonna. 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, failing to secure exclusive content over the long term or attract subscribers to rival the likes of Spotify. 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.

Billboard reports that as of 2020, Tidal was still behind on payments to rights holders, a problem Square’s cash injection might solve. The company’s revenue reportedly grew 13 percent to $166.9 million in 2019 according to financial documents filed in the UK by parent company Project Panther Bidco, but losses also rose from $36 million to $55.19 million in that same period.

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. “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 of directors. “I said 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,” said Jay-Z in a press statement. “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!”

Comments

Soooo when does Jack complete the full Elon and combine Twitter and Square?

This actually makes a lot of sense. A direct link to listening and purchasing band merch through the music app, as well as "tipping" smaller artists you like. It’s a shame its Tidal though, I dont know a single person that uses that service.

I see this as a relatively inexpensive proof of concept for Square. Buying into Spotify would be much more costly and YT music, apple music and amazon music are non starters for this type of business.

YouTube basically already offers this and could easily integrate it into YouTube music. If an artist has a YouTube channel they can already put a merch shelf under their videos, have a Store tab on their channel page, have tour information and links to ticket sales under their videos, etc.

Yeah but Google would have to actually build that into it’s Music app which is being developed at a glacial pace lol

/s…ish

YouTube basically already offers this and could easily integrate it into YouTube music. If an artist has a YouTube channel they can already put a merch shelf under their videos, have a Store tab on their channel page, have tour information and links to ticket sales under their videos, etc.

I got a 4 month trial for £4 and I’ve used it on and off since. The app is nice, I’m not really that much of an expert to be able to nitpick parts of the app, but the thing I found most useful out of the trial was them linking a music playlist transfer website. This was hugely helpful because for years I’ve just listened to music at my computer on youtube and hence have big old youtube playlists. For me the easiest solution would be to just get Youtube Music but fuck paying Google for a service given the fact they can send anything to the graveyard on a whim..
Anyway back to Tidal – I was interested in their higher quality music, but most genres I listen to aren’t really supported in their library. I won’t renew after the trial ends that’s for sure, especially for that price. Plus to add insult to injury turns out I can’t use Tidal on Echo speakers here in the UK

FWIW, I believe YouTube Music/Premium’s subscriber numbers have actually been seeing steady growth so I think that means Google will actually stick around for the long haul for once which is nice.

I guess there’s also the fact that Youtube music AFAIK doesn’t play well with Echo speakers for eg. Most folks I know are either on Apple Music or Spotify seems to be the main agnostic choice. It’s the latter I keep getting asked for. Mostly though I think it’s my bitterness towards Google at perceived wrongs (see Inbox) that puts me off wanting to give them any money. Though having used Youtube premium and gotten used to the joy of no adverts I’m tempted to just give in to the bastards

Here in the U.S. YouTube Music comes bundled with YouTube Premium for no additional cost. (Like you, I love the ad-free YouTube.) However, despite using Spotify since it became available here (2011?,) I now feel the dissonance of "paying" for two music streaming services, and may drop Spotify. Sadly, I feel like if I do that Google wins another round.

Honestly, I won’t mind just sticking to Youtube Music. Like I said, I’d like to hope it works well with my speakers. An odd thing I noticed recently is when I bought a refurbished Chromecast audio to connect to some nice analogue speakers – Youtube Music would have a real headache trying to cast the audio to it (regular Youtube just seems to shit the bed for me if I ever dare try to cast audio only).

$200m, they bought a third of it. It valued the company at $600m.

So depending on how "significant" the "significant majority ownership" is, they may not have taken too much of a bath.

Tidal having a smaller valuation today than in 2017 says it all. Im sure Dorsey feels he is a Jack of all trades, but something truly magical have to happen to turn this sinking ship around.

Forgot to write at 600 million. I’m assuming Tidal is currently (over)valued in the high 300 millions, which while not a complete wash, is still pretty painful.

This seems like poor timing given Spotify’s recent announcement of their plans to launch a lossless streaming service coupled with a renewed focus on supporting content creators (indie artists and podcasters, both of which Tidal severely lags behind in).

I can’t see what Square has to offer to Sony Music and EMI and all those other giant music publishers.

Jack is executing like he has never executed before. His plan is to turn Square and Twitter into places where creators feel comfortable making a living and being creative is amazing. Essentially feeling appreciated. Creators do not like Spotify! Period! If you think Spotify has won this you are crazy. Cashapp have done the been a long time supporter of artists. He added Jay-Z to the board of an already successful Company and gave shares so he and the artists that invested in Tidal still feel the sense of ownership that the wanted. This is an all around Good move. Jack is separating himself from the rest of the tech leaders and I believe this is a period where investing in Twitter and Square stocks is a great idea.

I like the idea of the artists also having a stake in Square. They weren’t left out of the deal. Other companies wouldn’t even think about something like that in an acquisition deal.

it happens all the time. When companies merge, most of the time shareholders in the subsumed company take shares of the company doing the subsuming. It’s a way to buy a company without actually paying that much cash for it.

Spotify’s bringing hi-fidelity audio later this year and Jay-Z wants out.

Jay Z wanted out the moment he purchased. He’s been in deals since day dot.

In its early days, Tidal’s interface appealed to me when Spotify’s wasn’t cutting it. It had a mature vibe. Spotify’s interface still puts me off. It’s all about the payola-like playlists and now podcasts have intruded and I’m just not for that. And though I tried the HIFI tier on Tidal, I was content with the 320kbps tier longer-term. Tidal also dabbled (perhaps they still do; I let my sub lapse years ago) in live programming that intrigued me, even if it was sparse. The introduction of artists’ curation of playlists spanning genres was also a plus. Then things got weird. They started to spin the cover art like a vinyl record would. That choice still baffles me. Why. Just why. Then it got buggier. Habitual force-closes of the app were required to get things functional and refreshed properly.

Then Apple Music arrived and I’ve been on that drip ever since. It gave me what I wanted. An album-centric listening experience. Of course the playlists were inferior to Spotify’s for a long time, and they continued to mess with the structure of the Browse tab (only when the search tab came with easier genre search did my annoyance with Apple Music’s designers lessen), but as of March 2021, I cannot fathom what would make me switch. Everything is more intuitive than competitors’ approaches and even the Radio shows have their appeal. Even the more niche playlists are updated frequently and they incorporate songs that just don’t seem to be on Spotify’s curators’ radar vis-a-vis jazz-adjacent stuff and afro-beat and classical and prog-metal and flavors of R&B and the vast non-English world. One could poo-poo those efforts as rather surface and still mainstreamy, but for decent breadth, it’s hard to fault.

Call me if Square moves Tidal to a User Centric Payment Model, otherwise I’m still yawning.

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