(Hypebot) — Jay Z has completed the $350 million sale of 80% of music streaming service TIDAL to Jack Dorsey’s digital payments and financial services company Square. (more)
TIDAL was launched by Jay Z in 2015 for $56 million in a partnership with superstar artists including Beyonce, Rihanna, Kanye West, Madonna, Alicia Keys, Calvin Harris, and Chris Martin.
The premise then was that an artist-owned company could treat and pay all artists more fairly than one driven solely by profits. But in reality, TIDAL failed to attract a significant audience, and payments to artists remained small.
Enter Jack Dorsey – music lover, business visionary, and a man with very deep pockets. He is also the co-founder and CEO of Twitter.
But why buy a second-tier music streaming service? Dorsey says it’s to help artists.
In describing the acquisition, Jesse Dorogusker, the Square executive now in charge of TIDAL offered more of a vision statement than an action plan
“We see musicians as entrepreneurs who have some tools but not others. They don’t have great financial systems.”
That means helping musicians sell more merchandise, tickets, and special experiences using data, Dorogusker told Bloomberg.
A New Virtuous Cycle
Tidal and Square are in a unique position to create a virtuous cycle wherein they help artists better serve their fans which leads to more profits for the artist as well as TIDAL and Square.
Many artists already use Square to process credit card payments for sales at the merch table and online. Dorsey, Square, and TIDAL plan to expand those tools to help artists sell more and capture the contact info of every buyer.
Next, imagine Tidal and Square analyzing all of that incoming data and offering artists cash advances against future sales.
It’s a message that should resonate with artists looking hopefully to a post-pandemic world where incoming from touring, merch sales, and VIP experiences can make up as much as 80% of revenue.
Add in income from streaming and you begin to see the real potential of Jack Dorsey’s new virtuous cycle.
