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| Square buys a majority stake in Tidal's streaming service |
Square, a financial services company founded by Twitter CEO (Jack Dorsey), has acquired a controlling stake in Tidal, a high-definition audio and video streaming service from (Jay-Z) Jay-Z.
Square paid $ 297 million in cash and shares to buy its controlling stake and said Tidal operates independently of Square's other ventures.
Dorsey posted a question on Twitter about the reasons for the merger of broadcasting companies and financial services, and answered: The reason is to find new ways for artists to support their work.
“As Square provides sellers with new tools to make money, the company's involvement on Tidal helps artists find similar support in the new digital ecosystem,” Dorsey said.
He added: Given what Square can do about the Cash app for sellers and individuals of all sizes, we believe we can now work for artists and see success for them and for us.
Tidal premiered in Norway in 2014 and was subsequently acquired by Jay-Z Artists' Union for $ 56 million the following year.
The new owner puts Tidal in competition with streaming services from big tech companies and offers viewers high-quality audio data and exclusive content.
Tidal soon ran into trouble due to the inability to keep proprietary content safe for long periods of time and attract subscribers from competitors like Spotify.
In 2017, Sprint received a $ 200 million investment from Sprint. However, the following year, subscriber growth was reported to have stagnated.
At this point, the service is said to have nearly 3 million paying users, up from around 20 million Spotify users in the same year.
The company's revenue reportedly increased by 13% to $ 166.9 million in 2019, but losses over the same period also decreased from $ 36 million to $ 55.19 million.
Acting Head of Tide Services (Jesse Dorogusker) said Tide now has another opportunity to reinvent itself: the company continues to provide broadcast services to consumers while providing new tools for artists.
"We think streaming services are an important part of this and they are growing," Dorogusker added.
As part of the deal, Jay-Z joined Square's board of directors. Jay-Z said: Tide isn't just about streaming music, but six years later it's still a platform that supports the artist throughout all stages of his career.