Square to buy a majority stake in Tidal

Square Inc. announced Thursday that it is buying a majority stake in Jay-Z’s Tidal worth $297 million in cash and stock.

The payment company has successfully created a one-stop financial shop for all kinds of small businesses including coffee shops, restaurants, and flea markets. It is trying to achieve the same in the entertainment industry, starting with musicians.

Square’s CEO, Jack Dorsey (also Twitter’s CEO) said the move is in a bid to develop “new ways” for musicians to get paid. He is optimistic that the success Square has had with users and the Cash App can be achieved in the music industry.

Jay-Z will join Square’s board of directors, which will give him the leverage to influence decisions in the company. The Square deal is a big win for artists as it cuts out all third-party investors, allowing the artists to hold Tidal’s remaining shares.

In a press statement, Jay-Z said that Tidal’s vision is bigger than music streaming. It is a platform that helps artists grow their careers. “Artists deserve better tools to assist them in their creative journey.”

The deal is expected to close in the second quarter of 2021. If all goes as planned, Tidal will operate independently, according to the two companies.

“Why would a music streaming company and financial services company join forces?!” Dorsey said in a tweet, he added that the purpose was to find “new ways for artists to support their work.”

Dorsey says the deal with Tidal will help musicians find financial support in the new digital ecosystem.

“Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us,” Dorsey tweeted. “Square created ecosystems of tools for sellers & individuals, and we’ll do the same for artists.”

Tidal was founded in 2014 in Norway. A year later, the platform was bought by a group of artists led by Jay-Z for $56 million. The artists’ group includes Rihanna, Daft Punk, Coldplay, and Madonna.