Updated: Mar 10, 2021
Twitter co-founder Jack Dorsey has entered into a definitive agreement to acquire Jay-Z's majority ownership stake in music streaming platform Tidal. The streaming service will now operate independently within Square - Dorsey's financial services company - in a bid to expand his company’s mobile payment tools to emerging and established artists.
Square expects to pay a mix of cash and stock worth up to $297 million for a ‘significant majority’ ownership stake. Having launched Tidal in 2015, Jay-Z will join Square’s board of directors under the new deal. Under the terms, Tidal’s superstar co-owners, who include Beyoncé, Madonna and Rihanna, will also retain their stakes and become the second largest shareholders. Jay-Z bought Tidal in partnership with other artists for $56m in 2015. Since then the service has differentiated itself by offering high-quality audio and video, and by paying better royalty rates to artists compared to their rivals.
Announcing the new venture on his Twitter on March 4, Dorsey explained why he decided to incorporate Tidal into his financial services company.
“It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at intersections, and we believe there is a compelling one between music and the economy.”
Square founded in 2009, offers financial tools for small businesses, which will help artists to explore options such as receiving digital payments direct from fans.
“There are tools they need to be successful and that we are going to build for them,”
said Jesse Dorogusker, a Square executive who will run Tidal on an interim basis.