If you haven’t heard, Jay-Z announced his latest power move on March, 4th. Tidal, the artist-centric streaming platform is selling a majority stake to Square, the financial services company behind CashApp and Seller headed by Twitter CEO, Jack Dorsey for $297M.
Tidal will continue to operate independently under the Square umbrella, now with the added tech and financial capabilities granted by one of the largest mobile payments companies in the world in Square/CashApp – extending “Square’s purpose of economic empowerment to a new vertical: musicians.” As part of the deal, Jay-Z will join Square’s Board of directors.
While the reasoning behind the move might not be immediately obvious, this is actually a really interesting move with big implications for creators and artists. In addition to CashApp being hip hop’s clear favorite mobile payments platform, this move actually makes a lot more sense than it might appear on the surface.
As Jay said in his Twitter announcement, “Artists deserve better tools to assist them in their creative journey”. By integrating the capabilities of a company like Square with Tidal’s enormous, high-caliber catalog, and unique features like hi-def audio and retention of ownership, in addition to its brand equity and important place within the culture – the joint forces of Tidal and Square may prove to be a powerful tool for artists.
“It comes down to one simple idea: finding new ways for artists to support their work. New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
“I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers… Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board.”
“Together, TIDAL and Square will be music-obsessed and artist-focused while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”
The idea behind Tidal has always been to become the streaming platform for artists. If you look closely at the “March 4th by Jay-Z” picture that accompanied the press release, (in between the red wine glasses) you’ll see a flowchart with all arrows point towards “Artists” at the center. For one, Tidal is partially owned by a list of popular artists – (who will remain partial owners after the new deal). Additionally, its revenue splits are much more favorable for the artist and it goes above and beyond other platforms with features to encourage fan-artist interaction. While the platform has made big strides since its founding in 2014, its additional features and exclusive releases have been unable to achieve significant market share. As of 2020, Tidal was responsible for less than 1% of global streams (in contrast to Spotify’s 32% and Apple Music’s 18% of global streams). Teaming up with the global powerhouse that is Square may finally be the move that tips the scales in Tidal’s favor – potentially enabling the most artist-friendly streaming service to finally compete on the same level as Spotify and Apple Music.
So what does all this mean for artists?
Well first off, it means that you may want to start paying attention to Tidal. Many artists, especially up-and-coming independent artists, overlook Tidal because of its relatively small market share. Not only is about to become a lot more popular from sheer hype around this new deal, but the announcement also comes with talk of a host of new possible features that could change the game in terms of how artists distribute, market, and make a living with their music.
Artists create art. That’s what they do. And in order to continue creating art, they also need to create revenue. It may sound counterintuitive, but the best thing you can do for an artist isn’t to help them make art – it’s to help them make money… so they can continue making art. And that is exactly what the new Tidal – under Square – is expected to do.
The name of the game here is direct-to-consumer. The proposed ideas are all centered around creating meaningful interactions between artists and their audiences – centered around quality music, genuine connection, and voluntary transactions that put a much larger % of revenue generated into the hands of actual creators.
One of the most likely features is merch integration – i.e. a way for artists to offer products to their fans in a way that is seamlessly integrated and offers maximum value to both the artists and the supporter by cutting out the middleman as much as possible. Historically, merchandise has been one of the more lucrative streams of revenue for artists – and one they often maintain more control over – so innovations that reduce the friction of the buying experience could be a gamechanger for artists, particularly up-and-coming artists who may not have big streaming numbers.
Another likely addition is some kind of ticketing feature. (Before COVID) “Show money” is often cited by artists as the place where they “really make their money.” For when things open back up, we’re likely to see a ticketing feature built right into the Tidal platform that will let fans book tickets for shows and events with the click of a button. Especially when you consider Roc Nation’s continuing long-term partnership with Live Nation (the live event company), an in-house, fully integrated ticketing platform seems like a no-brainer. In the meantime, there is likely to be plenty of opportunity for facilitating both livestream and virtual events – and probably long after the end of the pandemic.
Another likely innovation that we’ll see arise from this partnership is some kind of blockchain/bitcoin/cryptocurrency-related feature. If you have been on the internet even one time in the past year, you’ve seen the hype around bitcoin and cryptocurrency. Without going too far down the crypto rabbit hole, it’s very likely that there will be some kind of blockchain-enabled feature. This could in the form of blockchain tech that protects and helps administer publishing and copyrights – or even a purpose-built cryptocurrency that fans and artists would use to transact and interact on the platform.
Jay and Jack have even taken the first step already. In February of this year, before the Tidal x Square announcement, they collabed on another power move that you may not have heard about – joining forces to donate 500 Bitcoin (roughly $24M) to create an endowment fund called Btrust aimed at jumpstarting Bitcoin and blockchain development in India and Africa.
Lastly, there is a high probability that we’ll be seeing a feature that enables that much-hyped blockchain-based technology of NFTs (non-fungible tokens). In short, the best way to visualize NFTs is as a digital collectible. Using blockchain technology, NFTs make it possible to create and trade digital assets – which artists are already using to seriously cash in on digital products like collectible digital art, exclusive singles, and even transact exclusive rights to songs, beat packs, and audio stems. As such, it only makes sense to assume that Tidal will take Square’s familiarity with online financial transactions and blockchain technology to help artists create and sell digital assets as NFTs.
To sum it up, Square’s acquisition of Tidal is definitely something to keep your eye on as an independent artist. Tidal is probably our greatest hope for an honest-to-goodness artist-centric streaming platform that actually puts artists first. Despite the occasional groans from disgruntled wannabe music execs who think Jay-Z is “selling out” with this move – all signs point to this being a good faith attempt to really revolutionize the modern music landscape in a way that shifts power towards artists and away from legacy corporations.
To succeed in the modern landscape, companies need to strike a balance between capabilities and culture. A tech platform in 2021 needs to have powerful features and a seamless user experience – but it also needs a strong brand. In the Tidal x Square deal, Jack brings the infrastructure and tech, and Jay brings the culture and all-important “cool factor.” As such, as an independent artist, you ought to be paying close attention to the features that rollout, and figure out how to use them to your advantage. Tidal will create new opportunities and new winners – the only question now is how many… and who they’ll be.