Tidal, Jay Z’s Streaming Service, Sells a Stake to Sprint
Jay Z's Tidal get a much needed investment from Sprint as the telecommunication giant purchased a 1/3 stake in the flagging streaming service.This article originally appeared on The New York Times
Don’t count Jay Z out of the streaming wars quite yet.
Two years ago, the rap star and entrepreneur bought Tidal, a small streaming service, for $56 million, with lofty — if vague — plans to build an online music empire that would lure customers with exclusive content from fellow celebrities.
The news media pounced on early stumbles by the service, and with its losses mounting, Tidal was quickly put on death watch by the music industry. Almost since Jay Z took it over, the service has been the subject of speculation that it would fail or be subsumed by a deep-pocket competitor like Apple.
But Jay Z, whose real name is Shawn Carter, found a lifeline through a deal announced on Monday in which Sprint will buy a one-third stake in the service for an undisclosed amount. The arrangement injects some needed investment in Tidal and allows it, at least for now, to remain an underdog in a streaming market that has become dominated by giants.
“Tidal has struggled to make a dent in the streaming market and has shallower pockets than Spotify, Apple or Amazon,” said Mark Mulligan, an analyst at Midia Research, a market research company. “The Sprint deal gives it access to a big customer base, free marketing and a war chest to take on the streaming incumbents.”
As part of the deal, Jay Z and the group of artist owners who helped introduce Tidal, including Beyoncé, Madonna, Kanye West and Alicia Keys, will continue to run the service, and Marcelo Claure, the chief executive of Sprint, will join Tidal’s board, the companies said.