Jack Dorsey and Jay-Z have formed a partnership.
Dorsey revealed on Thursday that Square, the mobile payments firm, had purchased a majority stake in Tidal, the music streaming service founded by Jay-Z and other musicians.
Jay-Z will join Square’s board of directors, and Dorsey is the CEO of Square, which will pay $297 million in cash and shares for majority control of Tidal. Square’s head of hardware, Jesse Dorogusker, will take over as interim CEO.
“Why would a music streaming company and a financial services company join forces?!” Dorsey wrote in a tweet announcing the news.
“It comes down to a simple idea: finding new ways for artists to support their work,” he wrote. “New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy.”
In a press release, Square stated that the transaction involved “a significant majority ownership stake.”
Since Bloomberg announced in December that Dorsey and Jay-Z were in negotiations, the agreement has been widely awaited. According to a source familiar with their relationship, the two men have spent a lot of time together in recent months in places like Hawaii and the Hamptons in Long Island.
Square would almost certainly use Tidal to expand its financial services to artists, allowing them to accept direct payments from fans. The contract, according to Jay-Z, would provide artists with “better tools to assist them in their creative journey.”
Tidal gives subscribers early or exclusive access to music and goods. The group purchased it in order to allow musicians more control over the music industry.
Even so, Tidal is a minor player in the music streaming industry, which is dominated by Apple, Amazon, Spotify, and YouTube, and Square expects Tidal to have “no significant effect” on its income this year.
I’m grateful for Jay’s vision, wisdom, and leadership. I knew TIDAL was something special as soon as I experienced it, and I’m inspired to work with him. He'll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes. https://t.co/YRfYjcWJQx pic.twitter.com/xBtq2xfwue
— jack (@jack) March 4, 2021