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Jay-Z sells “significant majority” of Tidal to Jack Dorsey’s Square

By | Published on Friday 5 March 2021

Tidal

Jay-Z has sold a “significant majority” of his Tidal streaming service to Twitter CEO Jack Dorsey’s Square company. Exactly how much of the streaming firm that accounts for isn’t clear, but it’s set Square back $297 million. Not bad, considering Jay-Z paid $56 million for the whole thing six years ago. And, you know, it’s Tidal.

“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”, reckons Jay-Z. “Artists deserve better tools to assist them in their creative journey. Jack is one of the greatest minds of our times, and our many discussions about Tidal’s endless possibilities have made me even more inspired about its future”.

Predominantly a financial services company, Square is best known for its mobile payments platform. As part of the new deal, Square will offer financial tools to artists on Tidal to help them collect royalties. Should they want such a thing.

When Jay-Z acquired what had previously been known as WiMP back in 2015, he brought on board a load of celebrity musician friends to join him as stakeholders in the company too – including Madonna, Chris Martin, Kanye West, Nicki Minaj and his wife Beyonce. This allowed him to push a narrative that Tidal was going to be the most artist-friendly streaming service to have ever existed anywhere.

Under this new deal, Dorsey said yesterday, those artists will collectively become “the second largest group of shareholders” in the streaming service. Back in 2017, tel co Sprint also acquired a 33% slice of the Tidal business, though – ahead of the Square deal – earlier this week Jay-Z bought back that stake for an undisclosed sum. The bulk of those returned shares will now go to Square.

“Why would a music streaming company and a financial services company join forces?” Dorsey wrote on Twitter, posing himself the obvious question.

“It comes down to a simple idea: finding new ways for artists to support their work”, he went on. “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”.

“To all of Tidal’s current listeners and fans: thank you for your loyalty and commitment to artists and their work”, he added. “Tidal will continue to be the best home for music, musicians, and culture. Our commitment to you is to constantly listen, learn, and work to make a service you love”.

Of course, somewhat ironically, Dorsey’s other company has found itself climbing up the music industry’s big tech gripe list in the last year, frequently getting a good old name check whenever record labels or music publishers moan about digital platforms hiding behind the copyright safe harbour to avoid paying for all the music that their users upload.

Indeed, when the boss of the Recording Industry Association Of America, Mitch Glazier, included a customary big tech moan in a blog post about his organisation’s most recent stats pack, he honed in on Twitter in the spot where YouTube would have taken the heat a few years back. “Ongoing holdout services – like … Twitter – show just how hard some platforms will resist paying for the music that powers their own success”, he wrote.

Quite a few music industry reps noted that fact yesterday when Dorsey tweeted about how much he wants to find “new ways for artists to support their work”. Had he even considered the old way of just paying when your platform streams those artists’ music, they wondered.

Maybe Jay-Z could have a word. After all, he’ll be seeing quite a bit of Dorsey now this deal has been done. Because, see, under said deal, Jay-Z will join Square’s board, where he will “help lead our entire company, including Seller and the Cash App, as soon as the deal closes”.

Commenting on that, Jay-Z himself says that he and Dorsey “share visions” and therefore he is “excited to join the Square board”. His partnership with Dorsey, he adds, “will be a game-changer for many”, which is why “I look forward to all this new chapter has to offer!”

Of course, as well as all the game-changing and looking forward and new chapters, Jay-Z might have been at least slightly motivated by the money generated by this sale. This is his second deal to sell off a significant stake in one of his businesses in recent weeks. Last month, he sold 50% of his champagne company Armand de Brignac to LVMH Mo√ęt Hennessy Louis Vuitton.

In an interview last month, he admitted that the Armand de Brinac deal was done as his main entertainment company took a hit due to the pandemic. “I think Roc Nation will be fine”, he said. “Like all entertainment companies, it will eventually recover. You just have to be smart and prudent at a time like this”.



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