(Reuters) – Payments firm Square Inc agreed on Thursday to buy a majority stake in rapper Jay-Z\u2019s Tidal music streaming service for $297 million in a deal that could popularize blockchain or other new approaches to storing and buying online media.<\/p>\n
Square Chief Executive Jack Dorsey, who also runs Twitter Inc, said in a statement that the tie-up \u201ccomes down to one simple idea: finding new ways for artists to support their work.\u201d<\/p>\n
Square and Tidal would work on new listening experiences \u201cto bring fans closer together,\u201d simple integrations for merchandise sales and financial tools for artists, he added in a Twitter post.<\/p>\n
Such new offerings could take advantage of emerging technologies such as blockchain and cryptocurrencies that Dorsey views highly, said Avivah Litan, a technology analyst at consulting company Gartner.<\/p>\n
\u201cYou need the applications to drive the new economy,\u201d Litan said. \u201cNo one\u2019s going to just go get a cryptocurrency wallet if there\u2019s nothing to buy.\u201d<\/p>\n
Among the obscure blockchain systems that Square and Tidal could help popularize are digital files known as non-fungible tokens (NFT) that serve as digital signatures to certify who owns photos, videos and other online media.<\/p>\n
The provenance of autographs and memorabilia could be tracked by associated NFT, Litan said, potentially making them even more valuable and significant to artists\u2019 fans.<\/p>\n
Dorsey has supported so-called decentralization technologies such as blockchain because they enable people to store data and process transactions without relying on big tech companies and other service providers that profit off being a gatekeeper.<\/p>\n
While companies still could develop related businesses, consumers would have more control over what they view and own online, Dorsey said at a conference last year.<\/p>\n
Martha Bennett, an analyst at the consulting firm Forrester, said companies and artists already trying to sell music directly to fans through blockchain-based systems have had limited success.<\/p>\n
Tidal calls itself an artist-owned service backed by Kanye West, Beyonc\u00e9, Madonna, Rihanna and Nicki Minaj among others, and is available in more than 56 countries. It has sought to distinguish itself from Spotify and other rivals by committing to providing higher sound quality to listeners and a greater share of revenue to artists. But it has lagged in subscribers.<\/p>\n
\u201cWhen you think purely about breaking into the market, if somebody with the brand name of Jay-Z and Beyonce don\u2019t manage to break the stranglehold of the well-established streaming platforms then who else can,\u201d Bennett said.<\/p>\n
Square did not disclose the percentage of its ownership via the cash and stock deal. Tidal will operate independently and existing artist shareholders will maintain ownership, Square said.<\/p>\n
It added that Jay-Z, whose real name is Shawn Carter, would join its board.<\/p>\n
Jay-Z bought Tidal for roughly $56 million in 2015 from Norwegian entrepreneurs.<\/p>\n