Less than a week after Square launched its new bank to support its ambitions of delivering financial services to underserved populations, the company introduced its latest acquisition. This one will test the company’s economic empowerment capabilities in a new industry – music and entertainment.
Square announced last Thursday that it has entered into an agreement to acquire a majority ownership stake in TIDAL, a music platform led by Shawn “Jay-Z” Carter.
The announcement describes artists as “entrepreneurs with a dream” and highlights Square’s history of building more accessible financial solutions for individuals and small businesses that are not well served by the current system.
“TIDAL sets a high standard for supporting artists, capturing music culture, and delivering the best audio quality to fans,” said Jesse Dorogusker, a current Square executive who will serve as TIDAL’s interim head.
“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 while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”
According to Bloomberg, Carter’s original vision for TIDAL as a platform that would help enable artists to bring in more money has never materialized, and Square may be in a good position to help do that.
Artists face a complicated cash flow situation that includes managing money that could be coming from thousands of sources at different times, alongside a need for capital to fund things like recording sessions or the gear and staff needed to go on tour, the article said.
“It comes down to one simple idea: finding new ways for artists to support their work,” said Jack Dorsey, Square’s cofounder and CEO.
“New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
“I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers,” Carter said.
“Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”
Carter plans to join Square’s board of directors after the transaction closes, which the companies expect to happen during the second quarter. Square is paying $297 million in cash and stock for its stake.