Holy Grail? Sprint Acquires 33 Percent Stake in Jay-Z’s Tidal
He’s a business, man: Jay-Z bought Tidal for $56 million. Two years later, he’s sold a third of the company to Sprint for $200 million.
In a deal worth a reported $200 million, Sprint announced that it has taken a 33 percent stake in Tidal, the subscription-based music streaming surface known for its high-fidelity sound quality and high-profile owner—that’s Jay-Z, in case you’ve been living under a rock the past couple of years.
Jay-Z acquired Tidal in 2015 with a mission to launch the world’s first artist-owned streaming service, designed to go toe-to-toe with Spotify and Apple Music and confront growing artist concerns over the fairness of their compensation via streaming platforms. As reported by Billboard, through flashy events, a robust PR strategy and the exclusive release of Kanye West’s “Life of Pablo,” Tidal grew from 540K listeners in 2015 to a reported 3 million in spring 2016.
(Never a dull moment in Tidal-land, earlier this week a Norwegian newspaper published a report claiming that Tidal has been inflating its numbers. For comparison, Spotify touts more than 100 million active listeners and 40 million paid subscribers worldwide.)
So, what does Sprint want with Tidal? A spokesperson for Sprint told WIRED that current customers will soon benefit from “unlimited access to exclusive artist content not available anywhere else.” Does that mean free Tidal for all 45 million Sprint customers? Time will tell. These details and more “will be unveiled soon,” she said.
MarketWatch reported that the deal allegedly also includes a $75 million marketing budget. This investment could assist with Sprint’s already aggressive advertising tactics over the past year, which have included direct attacks at competitors’ prices relative to overall coverage and the commandeering of Verizon’s famous “Can you hear me now?” guy. The chart below illustrates Sprint’s progress relative to its rivals in the wireless space.
As reported by The New York Times, Sprint’s investment offers a lifeline to the struggling Tidal; in turn, Sprint benefits from access to Jay-Z, as well as Tidal’s star power and creative prowess. As for Jay-Z, well, life is going OK.
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