Jack Dorsey's Square buys Jay-Z's Tidal music streaming service

Financial technology company Square, Inc. says it has reached an agreement to acquire a "significant majority ownership"of Tidal, the music streaming service partly owned by Jay-Z.

Under the deal announced today, Square will pay $297 million US in cash and stock for Tidal, Jay-Z will be named to Square's board of directors, and he and other artists who currently own shares in Tidal will remain stakeholders.

"It comes down to one simple idea: finding new ways for artists to support their work," Dorsey was quoted as saying in a press release.

"I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture."

Dorsey is also the co-founder and CEO of Twitter. Jay-Z and Dorsey have spent much time together in the past few months. The deal itself has been generally anticipated since Bloomberg reported the two were discussing acquisition in December of 2020.

San Francisco-based Tidal is owned by a variety of artists, including musicians and entrepreneurs Jay-Z and Beyonc Knowles. It has presented itself as the artist-friendly alternative to other music streamers, while Jay-Z himself has been a vocal critic of how tech companies treat creators.

In the release,Square saidit will take Tidal's goals further for musicians, using the same tools ithas for businesses with its payment systems.

Still, Tidal occupies a small space in an industry already dominated by streaming services like Spotify, Amazon and Apple. After moving his music exclusively to Tidal in 2017, Jay-Z returned his content to Spotify in 2019 leading to speculation that the service was struggling.

Square said it expects Tidal will have little "material impact" on its revenue in 2021.