U.S. wireless carrier Sprint said on Monday it would buy 33 percent of Tidal, a music streaming service owned by rapper Jay Z, marking a move to more content driven services in a highly competitive wireless market…
WELL, THIS WAS SOMEWHAT UNEXPECTED
Well, this was somewhat unexpected. Sprint just bought a 33 percent stake in Tidal, giving the carrier a significant (though not controlling) influence over Jay Z’s streaming music service. They’re not discussing the terms of the partnership, but it’ll take Tidal’s fondness for exclusives one step further. Tidal will offer exclusive content that will only be available to Sprint subscribers — yes, even being a loyal listener won’t be enough. you’ll hear more details on offers and promos “soon,” Sprint says.
THE TWO UNSURPRISINGLY HOPE TO GROW THEIR CUSTOMER
The two unsurprisingly hope to grow their customer bases through the alliance, albeit for somewhat different reasons. Sprint gets the sort of media perk that it hasn’t had lately. It now has an answer (if currently a limited one) to AT&T’s DirecTV services and promos, T-Mobile’s Music Freedom and Binge On, and Verizon offerings like Go90 and NFL Mobile. The network has been faring better than usual lately (it’s adding more customers and lowering its turnover), but it’s still posting losses and isn’t growing as quickly as peers like T-Mobile.
FOR TIDAL, THIS MAY BE MORE VITAL
For Tidal, this may be more vital. Even if you discount questions about its subscriber base, the service is unquestionably smaller than heavyweights like Apple Music and Spotify — a pact with Sprint could help it get noticed by customers that might otherwise make a beeline for one of the bigger names. Also, a 33 percent stake is hefty for any company, but it’s particularly important for a relatively small company. This could help Tidal focus more on growth and less on worrying about its bottom line, at least in the short term.
Update: A Billboard source appears to have spilled the beans on the deal. Reportedly, that 33 percent stake is worth $200 million — not a bad return on investment when Jay Z paid $56 million for Tidal’s parent company back in 2015. Of course, that indicates that Tidal is worth $600 million overall. It’s small potatoes next to Apple or Spotify, but nothing to sneeze at given the company’s relative youth and size.
The leak also hints at just why the two clinched the deal in the first place. Reportedly, the agreement includes a $75 million per year “dedicated marketing fund” that will fuel the exclusives. That’s a lot of money to funnel toward releases intended for one carrier’s subscribers, and it suggests that you’ll get a lot more than just the occasional unreleased track. There may well be meaningful exclusives that get Sprint customers to at least try Tidal, even if they’re not necessarily alluring enough to convince people to switch networks.