Funds agency Sq. Inc agreed on Thursday to purchase a majority stake in rapper Jay-Z’s Tidal music streaming service for $297 million in a deal that would popularize blockchain or different new approaches to storing and shopping for on-line media.
Sq. Chief Govt Jack Dorsey, who additionally runs Twitter Inc, stated in an announcement that the tie-up “comes down to at least one easy thought: discovering new methods for artists to assist their work.”
Such new choices might make the most of rising applied sciences corresponding to blockchain and cryptocurrencies that Dorsey views extremely, stated Avivah Litan, a expertise analyst at consulting firm Gartner.
I’m grateful for Jay’s imaginative and prescient, knowledge, and management. I knew TIDAL was one thing particular as quickly as I skilled it, and I’m impressed to work with him. He’ll now assist lead our complete firm, together with Vendor and the Money App, as quickly because the deal closes. https://t.co/YRfYjcWJQx pic.twitter.com/xBtq2xfwue
— jack (@jack) March 4, 2021
“You want the functions to drive the brand new economic system,” Litan stated. “Nobody’s going to simply go get a cryptocurrency pockets if there’s nothing to purchase.”
Among the many obscure blockchain methods that Sq. and Tidal might assist popularize are digital recordsdata generally known as non-fungible tokens (NFT) that function digital signatures to certify who owns images, movies and different on-line media.
The provenance of autographs and memorabilia might be tracked by related NFT, Litan stated, probably making them much more beneficial and important to artists’ followers.
Dorsey has supported so-called decentralization technologies corresponding to blockchain as a result of they permit folks to retailer knowledge and course of transactions with out counting on huge tech firms and different service suppliers that revenue off being a gatekeeper.
Whereas firms nonetheless might develop associated companies, customers would have extra management over what they view and personal on-line, Dorsey stated at a convention final yr.
Martha Bennett, an analyst on the consulting agency Forrester, stated firms and artists already attempting to promote music on to followers by means of blockchain-based methods have had restricted success.
Tidal calls itself an artist-owned service backed by Kanye West, Beyoncé, Madonna, Rihanna and Nicki Minaj amongst others, and is out there in additional than 56 international locations. It has sought to differentiate itself from Spotify and different rivals by committing to offering greater sound high quality to listeners and a better share of income to artists. However it has lagged in subscribers.
“Once you suppose purely about breaking into the market, if any individual with the model identify of Jay-Z and Beyonce do not handle to interrupt the stranglehold of the well-established streaming platforms then who else can,” Bennett stated.
Sq. didn’t disclose the proportion of its possession through the money and inventory deal. Tidal will function independently and present artist shareholders will preserve possession, Sq. stated.
It added that Jay-Z, whose actual identify is Shawn Carter, would be part of its board.
Jay-Z purchased Tidal for roughly $56 million in 2015 from Norwegian entrepreneurs.