Jay Z’s Tidal Sells 33% Stake to Sprint For About $200m: Tidal Might Have Access to 45 Million Subscribers
Sprint takes 33% stake in Tidal, plans streaming music for its 45M users
Tidal has sold a one-third stake in its business to US mobile operator Sprint, as the under-pressure streaming service owned by the rap star Jay Z looks to compete against larger rivals Apple and Spotify in digital music.
Sprint, the fourth-largest US telecoms group, paid about $200m for the stake, valuing Tidal at $600m, according to a person with direct knowledge of the deal.
Marcelo Claure, Sprint chief executive, will join Tidal’s board, while Jay Z and the company’s other artist-owners will continue to run the business, Sprint said in a statement.
The transaction will give Sprint’s 45m customers access to Tidal as well as “exclusive artist content” that has yet to be revealed, the company said.
The deal gives Tidal a cash boost at a time when it faces intense competition. Jay Z, whose real name is Shawn Carter, bought Tidal for $56m in January 2015 and relaunched the service in a star-studded press conference two months later, in an attempt to tilt the balance of power in the music industry.
Tidal separates itself from the pack by promoting an artist-first approach, which Mr Carter has said “sets us aside from a tech company selling advertising, or one selling hardware”. The company has also looked to lure new customers through “exclusives” — artists including Rihanna and Kanye West initially released their new albums for streaming only on Tidal last year.
Sprint’s move comes after its parent company, Japan’s SoftBank, held discussions with Mr Carter to buy a stake in Tidal, as the AfricaMetro reported in 2015. The deal fell through and Tidal agreed a partnership with Sprint to distribute the streaming service, although it was not exclusive.
Sprint is attempting to differentiate its product offering as larger rivals such as AT&T delve further into content. AT&T offers DirectTV now, a streaming television service, while Verizon has some exclusive rights to NFL games on mobile devices.
Sprint shares rose 3.3 per cent to $9.22 at midday in New York, defying declines in the broader stock market.
In any case, this latest investment is not only will give Tidal a cash injection — and potentially a much, much larger number of subscribers — but it also points to how Sprint — like other carriers, is looking for ways to differentiate itself from the rest of the pack.
“Jay saw not only a business need, but a cultural one, and put his heart and grit into building TIDAL into a world-class music streaming platform that is unrivaled in quality and content,” said Claure in a statement. “The passion and dedication that these artist-owners bring to fans will enable Sprint to offer new and existing customers access to exclusive content and entertainment experiences in a way no other service can.”
Recall that Sprint and Tidal first started to work together in 2015, announcing a relationship at Tidal’s relaunch — although the companies never revealed details about what they were doing together and even specifically denied investing in Tidal. Now, Sprint’s chief executive officer, Marcelo Claure, will join TIDAL’s Board of Directors.
“Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential,” said JAY Z in a statement. “Marcelo understood our goal right away and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience.”
Sprint said it plans to make the service available to its mobile users, which today number 45 million across both subscription and pre-paid tiers. “Tidal and its artists will make exclusive content that will only be available to current and new Sprint customers,” the companies noted.
Tidal is live in over 52 countries, with 42.5 million+ song catalog and 140,000 high-quality videos, the company says. The company differentiates itself from other streaming services in that it doesn’t offer a free tier of service. Basic services cost $9.99 per month, and a higher tier costs $19.99 for high-definition audio quality. Both come with music exclusive to Tidal.
The value of the stake is not being disclosed. Music Business Worldwide is reporting it at $200 million, valuing Tidal itself at $600 million. We have contacted Sprint to comment on this and all that a spokesperson would say is: “We don’t provide financial figures.”
A number of big companies in the US have been speculated to be sponsoring different blogs and journalists to spread negative comments or bad press about the streaming service but it seems like they were not successful.
Congrads to Hov, Jay, Tidal, Sprint and everyone involved!!