Spotify and Apple Music are the two biggest players in the streaming music game, but thanks to a new deal valued at $297 million, Square is looking to change that tune by acquiring a majority stake in Tidal.
In a series of tweets, Square founder and CEO Jack Dorsey (who is also the CEO of Twitter) explained the purchase by saying that even though a fintech company like Square might not seem to have much in common with music streaming service, Dorsey thinks Square and Tidal can work together to create a truly artist-driven business.
Dorsey said in a tweet that “New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.” Okay.
As part of the deal, famous rapper and former majority Tidal owner Jay-Z will join Square’s board of directors, with Jay-Z retaining a smaller stake in the music streaming company. In the meantime, with Jay-Z moving to help oversee a larger part of Square’s businesses including Seller and Cash App, Square’s head of hardware Jesse Dorogusker will serve as Tidal’s interim leader.
However, while a music service run by and designed to support artists big and small sounds really nice, it’s not immediately clear how Square intends to make that happen. Though based on the success of Square’s other ventures like Cash App, Dorsey seems confident that Square will be able to transform Tidal in a similar fashion.
“We’re going to start small and focus on the most critical needs of artists and growing their fanbases,” Dorsey said.
It looks to be some time before this joining of forces is expected to bear fruit because according to Bloomberg, Square says Tidal isn’t expected to have a meaningful impact on Square’s sales or profits this year, with Tidal interim lead Jesse Dorogusker saying that Tidal is less focused on Tidal’s market share and more interested in seeing Dorsey and Jay-Z’s vision of an artist-driven business come together.