Jay-Z and Jack Dorsey are officially going into business.
Square announced on Thursday that it was buying music streaming service TIDAL, which is co-owned by Jay-Z. The company is paying $297 million in cash and stock to bring TIDAL under its umbrella, a move Square and Twitter founder Jack Dorsey is enthusiastic about.
“New ideas are found at intersections, and we believe there’s a compelling one between music and the economy,” Dorsey said in a statement.
Jay-Z will serve on TIDAL’s board of directors and retain some ownership of the service, along with several other artists like Beyoncé and Rihanna, but Square will have the majority stake. Jay-Z bought TIDAL back in 2015 for $56 million, which makes Square’s payment nearly six times higher.
It’s been rumored for months that Dorsey and Jay-Z were discussing the deal. The two were spotted together in the Hamptons in August, and again in Hawaii in December.
“Jack is one of the greatest minds of our times, and our many discussions about TIDAL’s endless possibilities have made me even more inspired about its future,” Jay-Z wrote in a tweet. “This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many.”
The deal signals a shift for Square, a digital payment company with no prior history in music or streaming. It’s not entirely clear how the two companies will function together, or what they stand to gain from the acquisition. Square could breathe new life into TIDAL, which has been lagging behind other streaming platforms for years.
Square, meanwhile, could gain a foothold in the streaming industry while diversifying itself, much like companies like Tencent or Disney, who own seemingly unrelated businesses. However, Jesse Dorogusker, the Square executive who will lead TIDAL in this interim period, said that Square wasn’t interested in streaming, but rather in bringing in Jay-Z to collaborate with Dorsey, according to Bloomberg.
Dorogusker also told Bloomberg that the two companies are better suited for one another than it seems: he implied that Square’s commerce and payments platform could integrate with TIDAL. “There was a real opportunity at this intersection of music and art and the economy that was uniquely made for the pair of us,” he said.
