Tidal has a new business partner, and this time, it’s not a fellow artist. The streaming service co-owned by a number of musicians led by Jay-Z has sold off a third of its shares to Sprint, establishing a partnership that both sides hope will bring about a much needed revival.
Today’s announcement is light on details. The only thing the two companies are saying for sure is that Sprint now owns 33 percent of Tidal, and that this is intended as a business partnership that will bring exclusive content to Sprint subscribers. What that content will consist of is unknown. Other strategies that could be pursued include preloading Tidal onto Sprint phones, offering discounted monthly rates to Sprint subscribers, or making streaming music on Tidal not count against data caps, like T-Mobile has done with many other streaming music services. However, that last approach may prove challenging to implement in this case — Tidal’s $20 monthly tier streams lossless music, requiring larger files streamed at higher bitrates.
Also unknown is how Sprint’s new stake affects Tidal’s existing ownership structure. When Tidal was purchased by Jay-Z and relaunched, it was put forward as an artist-owned streaming service. In reality, a handful of high-profile acts including Jay-Z, Beyoncé, Arcade Fire, Daft Punk, and the late Prince (whose estate is now suing Tidal over streamed music Tidal may not have had rights to), made up the ownership group, with Jay-Z retaining the lion’s share. We don’t know whether the 33 percent came from Jay-Z only, or if each of the artist partners gave up a bit of equity, as well.
As a result of the deal, Sprint CEO Marcelo Claure will join the Tidal board of directors. Along with Tidal’s leadership, he’ll have to figure out how to use Sprint’s subscriber base to boost Tidal’s subscriptions. It’s unknown exactly how many subscribers Tidal has, but it’s far behind the tens of millions of paid subscribers that Spotify and Apple Music have. Tidal’s claims of 3 million have recently been disputed after an investigation by a Norwegian publication (Tidal was created in Norway before being sold to Jay-Z), which suggests that the service only has around 1 million subscribers.
Less clear is how an as yet unpopular music service will drive new customers to Sprint. The carrier may be better served continuing to put resources toward a comeback during the rollout of 5G networks.