Jack Dorsey's Square Acquires Majority of Jay-Z's Tidal

Jack Dorsey's payment solutions company Square Inc. is buying a majority stake in music streaming company Tidal, a service partly owned by Jay-Z, (real name Shawn Carter) who will now become a board member. 

Square will pay $297 million in a mix of cash and stock to become Tidal’s “significant majority” owner, though Jay-Z and Tidal’s other existing artist-shareholders will retain some ownership in the company. Tidal will operate independently within Square, according to a company release, and Jay-Z will join Square’s board of directors.

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Dorsey confirmed the purchase in a Twitter thread on Thursday, also stating that Square’s purchase of Tidal aims to find “new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy.”

The acquisition extends Square’s purpose of economic empowerment to a new vertical: musicians. Artists are entrepreneurs with a dream and deserve access to systems, tools, and financial freedom to reach those dreams at every stage in their career. Square has helped millions of businesses start, run, and grow by providing them with the tools needed for success. With Cash App, Square has made financial services more relatable and accessible to millions of customers, many of whom have been historically overlooked and underserved. Square sees an opportunity to leverage those learnings to help musicians find new ways to support their work and make better decisions through Tidal

Tidal, which launched in 2014 and was purchased by Jay-Z for $56 million in 2015, originally billed itself as a premium version of Spotify. Tidal touted better sound quality and exclusive music by Jay-Z, Beyonce, and other artists, and aimed to give those artists more control over the distribution of their music.

But Tidal has struggled to compete against much larger streaming services such as Spotify and Apple. The privately-held company had three million paying subscriptions in 2016 when it last disclosed figures. Jay-Z surprised fans in December 2019 by moving his music catalogue back to Spotify after a two-year hiatus.

Perhaps the Square-Tidal deal won't generate the future growth that Square imagines. But the deal is cheap, snagging Jay Z as a leader is a win, and it's hard to win by only playing corporate defense.