Digital payment company Square said on Thursday that it will buy a controlling stake in streaming music platform Tidal from a group led by rap star JAY-Z for US$297 million (approximately Rs 21.6 billion) in cash and stocks.

The fintech company led by Twitter CEO Jack Dorsey said in a statement: “This acquisition expands Square’s economic empowerment goals into a new area: musicians.”

Dorsey said: “It boils down to a simple idea: find new ways for artists to support their work.”

“We found new ideas at the intersection, and we believe that there is a convincing idea between music and the economy.”

JAY-Z acquired Tidal from Europe-based Aspiro for slightly more than US$56 million (approximately Rs 4.07 billion) in 2015, and tried to use the platform to give artists more control over their works.

The owner includes several other well-known artists, including Madonna, Rihanna and JAY-Z’s wife Beyonce. Tidal has listeners in more than 56 countries/regions and has established connections with more than 100 record companies and distributors.

However, Tidal has been struggling to compete with larger streaming services such as Spotify and Apple. The private company had 3 million paid subscriptions in 2016 when the data was last disclosed.

JAY-Z moved its music catalog back to Spotify after a two-year hiatus, which surprised fans in December 2019.

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Independent operation
The statement said that the transaction with Square created a new joint venture company that allowed the payment company to “own a substantial majority” with existing artist shareholders.

The statement said that Tide will “operate independently within Square.”

“I said from the beginning that Tidal is more than just streaming music, and six years later, Tidal is still a platform that can support the artist at all stages of his career,” said JAY-Z, whose full name is Shawn Carter.

“Artists should have better tools to assist them in their creative journey. Jack and I had a lot of discussions about the endless possibilities of Tidal, which gave me more inspiration for Tidal’s future.”

As part of the transaction, JAY-Z will join Square’s board of directors.

Dorsey said in a series of tweets: “I thank Jay for his vision, wisdom and leadership. I know that Tidal is very special and inspired to work with him. He will now be able to help after the deal is completed. Lead our entire company, including sellers and Cash App.”

The Twitter chief added that this collaboration makes sense because “Square has created an ecosystem of tools for sellers and individuals, and we will do the same for artists. We will work on a new listening experience to bring Fans get closer, for simple integration of merchandise sales, modern collaboration tools and new sources of supplementary income.”

When the transaction is completed, Square executive Jesse Dorogusker will serve as Tidal’s interim director.

Dorogusker said: “Tidal sets high standards for supporting artists, capturing music culture and providing fans with the best audio quality.” “As we explore new artist tools, listener experiences, and financial systems that can help artists succeed , Tidal and Square will work together on music and artists.”

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