Square, Jack Dorsey’s digital payments company, has announced that it will be acquiring a majority ownership stake in the music streaming service Tidal, currently owned by rap artist Jay-Z.
Jay-Z, who bought Tidal in 2015 for US$56 million, will be appointed by Dorsey to Square’s Board of Directors. Jay-Z will also, according to Dorsey, “help lead our entire company, including Seller and the Cash App, as soon as the deal closes.”
Square says that existing artist shareholders will be the remaining stakeholders.
The US$297 million deal is reported to consist of cash and stock and is expected to close in the second quarter of 2021.
What Square does is offer out-of-the-box financial solutions for small merchants – its services are designed to streamline the way businesses take payment. By joining forces with Jay-Z’s artist-owned Tidal streaming service, it plans to do the same thing for musicians.
“Making the economy work for artists is similar to what Square has done for sellers,” CEO Dorsey said in a statement.
It’s not the first time Jay-Z and Dorsey have partnered; earlier this year they endowed a bitcoin trust to support the digital coin’s development in Africa and India.
Though Square hasn’t expressed in detail exactly how it will help Tidal build its business, there is synergy between the music industry and Square’s existing market, which includes payments and commerce. This is according to Jesse Dorogusker, the Square executive who will serve as interim leader of Tidal inside its new parent company.
It’s also an attractive way to diversify the company’s offerings and create a new line of business. Square sees an opportunity to innovate within the streaming service, with the potential to help artists sell merchandise or concert tickets, or to introduce features that allow more interaction between artists and fans.
“There was a real opportunity at this intersection of music and art and the economy that was uniquely made for the pair of us,” Dorogusker said. “Artists sell tickets, they sell special experiences.
“The streaming service is a unique place that artists and fans do connect, and that’s underutilised right now. There isn’t a lot of interaction.”
Square says Tidal will operate independently within Square, alongside its Seller and Cash App platforms.
