Sprint and rapper Jay Z have made a deal regarding rapper’s music streaming service, Tidal. Jay Z has sold one third of the service to Sprint for $200 million. The carrier will now give access to the music service to its 45 million customers across the country.
The deal will also include having Sprint CEO Marcelo Claure as the board of director for Tidal. It has also committed to provide $75 million for annual artist marketing fund dedicated to the artists’ exclusive releases.
Tidal has lately been seeing a growing number of subscribers as pointed out by a Norwegian business newspaper. It is based in Oslo and claims to have over 3 million subscribers, however, others reports that the number is 1 million. Nonetheless, the service is a popular one that has the potential to benefit Sprint and of course its 45 million users.
The business savvy rapper launched this music service back in 2015 after buying a Swedish tech company Aspiro for $56 million. The service offers exclusive music content to its subscribers and is considered artist friendly too. It has some very big names from the music industry on board like Kanye West, Rihanna and of course Beyoncé. Several other artists own stakes in this service like Alicia Keys, Jack White and Daft Punk.
Ever since its release, it faces stiff competition with already existing and quite successful music streaming services like Spotify and Apple Music. Considering the competition, it makes sense to have Sprint buy the stakes in it to bring the exclusive content to its 45 million users which is obviously going to increase Tidal’s subscriber numbers.
Unlike Spotify, Tidal does not offer free service that usually is the way to acquire more customers. So the deal would essentially benefit it by every means. Jay Z and other artists who own the rest of the shares will continue to operate the service and release premium quality exclusive content.
As for the rapper, his net worth is only going to be supplemented with this deal as he currently ranks as the 11th richest American celebrity with a net worth of $610 million. Sprint, on the other hand, gets a high quality content music service to provide its customers. They could very well have music that is available to Sprint users exclusively which can help make it popular among their users. However, for the artist that means reducing the market share for them.
If you remember, Kanye West’ The Life of Pablo and Beyonce’s Lemonade were first exclusively available only on Tidal. This does aid in getting more subscribers on board that want to hear the newly released music from their favorite artists. But for this to work one needs star power which Tidal definitely has plenty of with Jay Z himself and the likes of him releasing music now and then to keep the interest alive. It seems that with this deal Tidal will face less stiff competition from rival services.