Square, the mobile payments firm, is run by Jack Dorsey, Twitter’s Co-founder, has acquired a majority stake in Jay-Z’s Tidal video and audio music streaming service at a $297 million deal. Tidal’s superstar co-owners, including Beyonce, Madonna, and Rihanna, will retain their stakes according to the agreement’s terms. They will become the second-largest shareholders of the company. Jay-Z will be joining the Square’s board of directors.
Jack Dorsey tweeted, posing the obvious question, “Why would a music streaming company and a financial services company join forces?” He said it comes down to a simple idea of finding new ways for artists to support their work. He claims that new ideas take birth at intersections and believe that there is a compelling idea between music and the economy.
Square said that it had taken a significant stake in Tidal. Jay-Z bought Tidal in 2016 in partnership with other artists for $56 million. The service has been paying better royalty rates to artists than the rivals like Spotify. It also has artists like Coldplay and Daft Punk as owners of Tidal.
Tidal carved out the niche market by offering more than 70 million songs and 250,000 high-quality videos. Yet, the global market is dominated by giants like Spotify, Apple Music, and Amazon Music. To compete against Tidal, last month, Spotify announced its own high-resolution streaming option.