The price of Square's majority stake in Tidal.
Square, the mobile payment company co-founded by Jack Dorsey, has purchased a majority share in music streaming platform Tidal. Existing artist shareholders will remain as stakeholders (plus Sprint), and Tidal will continue to operate independently. The acquisition was announced this morning on Tidal’s Twitter account, along with a statement from Tidal creator Jay-Z.
“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,” Jay-Z says in the statement. “This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many.”
Dorsey shared a similar sentiment on Square’s website. He says Square understands this as an opportunity to help musicians find better ways to support their work. We can see some obvious ways this might work. For starters, Square integration could make it easier for artists to sell merchandise directly to consumers. And then there's Dorsey's love of all things blockchain. Could we see Tidal help artists turn tracks or albums into collectible NFTs (Non-Fungible Tokens)?
Square’s acquisition might just be the best way for Tidal to survive in a market increasingly dominated by Spotify. And with Jay-Z very much still part of the company, Tidal could manage to keep its personality in the process, too.
Coming for Spotify, maybe — From the very start, Tidal has been about two things: supporting artists and providing high-quality streaming for listeners. It’s a noble cause that’s often proven not-so-profitable for Tidal, which has struggled to find a solid footing. Spotify’s free options and general momentum have long kept its spot as the number one music streaming service in the world.
Tidal’s one claim to fame has been its super-high-quality audio files. Tidal’s "HiFi" tier streams at lossless CD quality — a far cry from Spotify’s 320kbps max rate.
Here’s the thing though: Spotify is getting ready to offer its own higher bitrate service this year. While the full details of Spotify’s lossless-quality streaming are still unknown, it’s undoubtedly a huge blow to Tidal considering Spotify's existing users will likely be able to upgrade to the new service at the tap of a button, and it'll make encouraging users to switch to Tidal even more challenging.
Let’s talk NFTs — There’s one more detail that makes this acquisition particularly juicy in a future-looking sense. Square is very interested in the burgeoning cryptocurrency market, with nearly $250 million of its total assets now in bitcoin.
Combine this interest with the new hype around selling art as non-fungible tokens (NFTs) and we might just have an entirely new business model on our hands. What if — and we’re just spitballing here — Square helped Tidal open a full-fledged album-as-NFT marketplace?
Fighting Spotify’s streaming supremacy is going to be an uphill (nearly vertical) battle for Tidal. But it definitely has a better chance of doing so with Jack Dorsey’s money and crypto-related connections behind it.