Square Inc has stock levels

Place to acquire a majority stake in Tidal

Jack Dorsey, CEO of Twitter, announced that Square, its financial services company, has acquired a controlling interest in music streaming service Tidal.

Square will pay $ 297 million in a mix of cash and stock, with existing artist shareholders remaining the second largest group.

Why did Square buy Tidal?

Square acquires a controlling stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders and JAY-Z joining Square's board of directors. Why should a music streaming company and financial services company merge ?!

- jack (@jack) March 4, 2021

Square, Inc. was founded in 2009 by Jack Dorsey and Jim McKelvey. It helps small businesses grow and get funding, accept payments, and manage inventory.

You may be wondering why a financial services company acquired a music streaming service. Dorsey went on Twitter to answer that exact question and said "making the economy work for artists [on Tidal] much like Square did for salespeople".

Square believes that helping musicians find ways to support their work and make better business decisions is best. This is the business game anyway.

Is Tidal a Good Buy?

You will be forgiven for wondering if Tidal is a worthwhile purchase, especially when many consider Spotify to be a better music streaming service than Tidal.

Tidal was launched in 2014 by the Norwegian company Aspiro. It was then bought by a group of artists led by Jay-Z, including Rihanna and Beyoncé.

Tidal sold on exclusive content from the artists with a stake in the company. However, over time, this exclusive content has found its way to the other music streaming services.

Another selling point is Tidal's lossless music quality, but other services like Amazon Music and Spotify will soon offer this too.

Here's the problem: Tidal has around three million subscribers (although even that is controversial, with reports it faked those numbers) and has been unable to make a profit. It lost $ 37 million in 2018. It will be interesting to see what buying Square does with Tidal. Will the service shift focus? Will it double?

As part of the purchase, Jay-Z is expected to join Square's board of directors. Jesse Dorogusker, Square Executive, will act as Tidal's interim head through the closure.

In Square's press release, Dorogusker said:

Square has also set a high standard for building elegant, accessible, and fair tools for sellers and individuals to economically empower them. Together, TIDAL and Square will be music obsessed and artist focused as we explore new artist tools, listening experiences, and access to financial systems that help artists succeed.

We'll see what the future holds for Tidal. Streaming music is a busy marketplace. Can Dorsey and McKelvey take Tidal to the top? We will see.