Jay-Z reportedly holding talks to sell TIDAL
Jay-Z has been holding talks about selling off his music streaming service TIDAL.
Bloomberg News reported the possible suitor is US tech billionaire Jack Dorsey, best known as co-founder and CEO of Twitter.
Dorsey wants to acquire the streaming platform to diversify his digital payments firm Square, whose shares leaped 267% year-to-date, and has a positive reputation at Wall Street, reports claim.
Bloomberg, which cited an unnamed source familiar with the situation, noted that the two men had been spotted in August chilling on a yacht in the Hamptons with Jay-Z’s wife Beyoncé, and again in November on a beach in Hawaii with actor Sean Penn.
The outlet also noted that the discussions might not necessarily end up in a sale, nor did it know how much money was on the table.
The report came when TIDAL began streaming the entire Metallica catalogue in late December, pointing out that albums like Master of Puppets and Ride The Lightning sounded “as flawless as they sounded in the mastering suite and exactly as the artists intended.”
Jay-Z paid $56 million for the service in early 2015, a year after it was set up by Norway’s Aspiro.
On paper it seemed bound for success, and touted as a new model for the biz.
For US$20 a month, it offered high-fidelity audio, and exclusives with its superstar owners including Beyoncé, Alicia Keys, Coldplay, Nicki Minaj, Madonna and Rihanna. Each of the 20 was reportedly given 3% equity in the platform.
TIDAL offered 75% royalties to musicians, producers and songwriters. As the rapper said when he acquired the company: “Less profit for our bottom line, more money for the artist; fantastic.”
But it fared badly against Spotify and Apple Music. Four CEOs went rapidly through the revolving door.
TIDAL was also accused of fudging streaming numbers. Its last released subscriber figures, in 2016, was put at 4.2 million. At that time, Spotify had 100 million (latest figures 144 million) and Apple Music 13 million (latest figures, 72 million).
Jay-Z was trying to get rid of TIDAL a year after purchase, thinking he could get US$1 billion for it.
Instead, he ended up getting wireless carrier Sprint to take a 33% stake for US$200 million.
Reports claimed that in 2014 TIDAL lost US$10.4 million; US$28 million in 2015; then nearly US$44 million in 2016.
TIDAL is available in 56 countries including Australia with a library of 70 million tracks and 250,000 videos.
Analysts say that the acquisition of TIDAL would broaden its business model and give it cross-sale opportunity, and capitalise on its loyal customer base.