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.
The San Francisco payments company said Thursday that Mr. Carter will join its board as part of the deal, and Tidal’s current shareholders will remain co-owners.
Square—best known for its signature white card reader—has created a financial ecosystem for retailers, small-business owners and shoppers. It offers loans through its seller platform, and its Cash App payment service allows consumers to digitally store and transfer their money like they would at a bank.
It is looking to do much the same thing for musicians on the Tidal platform by, for example, integrating merchandise sales and hosting collaboration tools, Square Chief Executive Jack Dorsey said in a tweet Thursday morning.
“New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy,” Mr. Dorsey tweeted. “Making the economy work for artists is similar to what Square has done for sellers.”
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.
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.
With reporting by The Verge and WSJ
