TIDAL sells 33% stake to mobile network operator
American telecom company Sprint has acquired a 33% stake in Jay Z’s struggling streaming service TIDAL. Reports suggest that initial links between the two companies began two years ago, with the deal being finalised today.
Much of the losses incurred by TIDAL over the past few years have fallen to Jay Z who gave 3% of company shares to 15 artist owners upon the purchase and relaunch of the service in 2015.
While Sprint’s mobile customer base totals approximately 45 million people, the carrier will look to integrate TIDAL into their service and will offer exclusive content that will be available to Sprint customers only.
The deal, which MusicBusinessWorldwide claim to value at US$200 million, will also see a major funding injection for marketing TIDAL artist exclusives and initiatives. According to Billboard, US$75 million will be put towards albums, concerts and music videos to enhance the services offering.
It was also announced that Sprint’s Chief Executive Officer, Marcelo Claure, will also join TIDAL’s Board of Directors.
“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.
Jay Z said, “Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential.
“Marcelo understood our goal right away and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience.”
With questions still standing about Jay Z’s control and involvement in the streaming service in light of the new deal, TIDAL is set to thrive on the back of a mobile carrier with similar successful partnerships occurring over the past few years.
Streaming service Deezer formed a distribution partnership with mobile company Orange in the UK and France. In October 2016, the companies announced that they would extend their partnership for at least another two years, highlighting the value of mobile bundling and exclusive promotional offers.
Furthermore, various sources suggest that Sprint may be joined with fellow US mobile carrier T-Mobile if Japanese company Softbank, which owns Sprint, chooses to go ahead with their acquisition of T-Mobile.
If the deal were to eventuate, the newly combined Sprint/T-Mobile venture would boast roughly 115 million customers and a streaming service. This could potentially muster enough of an offering to lure customers away from the country’s other major telcos – AT&T and Verizon.
TIDAL has been caught up in a storm of accusations over the years regarding subscriber figures. In March 2016, the service claimed to have 3 million active subscribers, however, MIDA Research reported that the actual figures were close to 1 million. At the time, TIDAL said it was aware of the discrepancy and blamed the issue on lower-than-expected data first received from its original Swedish owners.
Earlier this month, the service was again accused of inflating its subscriber numbers. Norwegian newspaper Dagens Næringsliv claimed that it found internal reports found TIDAL only had 350,000 subscribers as of March 2015.