Square’s 80% stake in Jay-Z’s TIDAL has been finalized for $302 million
Image Credit: Jay-Z
Square’s majority stake along with the artist co-owners’ 20% stake, value the music streaming service at around $377.5 million.
Digital payments company Square’s CEO Jack Dorsey and TIDAL owner Jay-Z confirmed the deal worth $297 million in March earlier this year. This news and another deal for rapper Shawn ‘Jay-Z’ Carter, saw his net worth jump by 40% up to around $1.4 billion.
The 80% sale was finalized last week for $302 million. More than 5 times the $56.2 million Jay-Z paid for TIDAL (then WiMP) in 2015. However this most recent valuation at roughly $377.5 million, is around half the $600 million enterprise valuation achieved in 2017, when Sprint acquired a 33% minority stake for $200 million.
The remaining 20% stake will be held by the existing artist co-owners, including: Alicia Keys, Arcade Fire’s Win Butler and Regine Chassagne, Beyoncé, Calvin Harris, Coldplay’s Chris Martin, Daft Punk, Damian Marley, deadmau5, Indochine, J. Cole, Jack White, Jason Aldean, Kanye West, Lil Wayne, Madonna, Nicki Minaj, Rihanna, T.I. and Usher. According to TMZ, following the acquisition, Jay-Z and Roc Nation CEO Desiree Perez will stay on the TIDAL board.
TIDAL’s previous parent company Project Panther Bidco’s latest financial filing reveal the streaming platform generated $166.9 million in 2019, up 26.4% YoY, which represents an operating loss in 2019 of $55.3 million.
This news comes as TIDAL publish a new advert, claiming the streaming service pays out 4 times more than its competition.
Don’t take this claim at face value. According to The Trichordist’s stats published in March last year, TIDAL’s pay-per-stream rate was higher than most, at roughly $0.00876, while competition from Spotify for example was at $0.00348. This is misleading, as TIDAL does not offer a free tier, so naturally their payout averages significantly higher. TIDAL’s Average Revenue Per User (ARPU) is also higher due to their HiFi tier, which costs $19.99, rather than the $9.99 of their base level Premium tier. When compared to other premium-only music streaming services such as Apple Music, their payout closely lines up with these rivals. Apple Music recently said in an open letter, they pay artists an average of 1 cent per stream.