Tidal, the music streaming service Jay Z bought from Swedish parent company Aspiro for $56 million in 2015, may finally be turning the corner. Despite burning through three C.E.O.s in its first year, and lingering questions about its subscriber numbers, Tidal has sold a 33 percent stake to Sprint at a whopping $600 million valuation, according to multiple media reports. As part of the deal, Tidal will become available to Sprint’s 45 million customers and let the companies partner on artist exclusives, according to Billboard, which first reported the news.
Sprint’s $200 million investment marks a major vote of confidence from the telecom, which reportedly engaged in partnership talks with Tidal around its launch, though it said it had not invested at the time. It’s unclear whether Sprint users will get additional Tidal perks as a result of the investment, like receiving artist exclusives before other Tidal customers, or if using Tidal will not count against customer data caps for users without unlimited data plans. It’s also unclear how many subscribers Tidal really has. As of March 2016, one year after Tidal’s launch, Jay Z said the company had 3 million subscribers—far fewer than Apple Music’s 20 million paying subscribers, and less than a tenth of Spotify’s 40 million subscribers. In January, a Norwegian news outlet reported that even those numbers may have been inflated, with one music executive claiming that Tidal’s real number is below 1 million.
Even so, Tidal has one major asset that sets it apart from streaming competitors like Spotify and Rdio (R.I.P.): access to artist exclusives that are unavailable anywhere else. Tidal, which has marketed itself as a platform for artists, by artists, is a majority performed-owned company that purports to pay double the royalties of other services. Jay Z has leveraged that pitch, along with his own unique celebrity profile in the industry, to bring on board a number of his friends, including Rihanna and Kanye West, and his wife, Beyoncé. When Tidal launched two years ago, other artists like Daft Punk, Arcade Fire, Coldplay, Alicia Keys, and Madonna also lent their support. In exchange for becoming co-owners of the music platform, they agreed to release their music first and exclusively through Tidal. The company’s two-dozen artist-owners will still be part-owners after the Sprint deal.
Tidal, which has been on death watch by the music industry nearly since its inception, may finally find a reprieve with its new investment, and eye-watering new valuation. But the music-streaming industry remains an unforgiving market. Spotify and Pandora are still struggling to achieve profitability. Tidal holding company Aspiro reported a $28 million loss in 2015, and rumors have long swirled that it could be purchased by a bigger company like Apple. By offloading much of the financial risk of owning the service, Jay Z looks well-positioned for an exit.
