Money Matters: Tidal Music and Sprint Join Forces
Late last month, news broke that a deal between phone provider
Sprint and Tidal had been finalized. Sprint paid $200 million to acquire 33% of the music streaming service.
Tidal was launched in 2014 by Swedish company Aspiro. A year later, rapper and businessman Jay Z bought Tidal for $56 million and re-launched with the purpose of bringing artists and fans together through the exclusive use of artist content.
Unfortunately, since Tidal’s launch in 2014, Jay Z experienced backlash as a result of the general public deeming the app to be overpriced at $20 per month. Jay Z hoped that Tidal’s exclusive content from big-name artists would help it stand out, but people felt that wasn’t enough to justify spending upwards of $240 a year for the service. Many agreed that signing up for Tidal, which essentially is a more expensive version of Spotify, would only succeed in making the rich richer and drive more individuals towards music piracy. According to Victor Luckerson, who wrote the Time Magazine article “Drake Reportedly Walked Out on Tidal At the Very Last Minute”, artists who initially signed on with Tidal, including megastars Drake and Taylor Swift, began backing out after the general public turned on the app, causing more outcry.
Sprint is currently in the same boat as Tidal: trying to stay afloat against major competitors. As of January 2017, Sprint is rated as the fourth most subscribed phone company against Verizon, AT&T and T-Mobile. The collective venture between Tidal and Sprint could bring in much-needed promotion to the phone service.
In 2015, Tidal reached out to Sprint to strike a deal and was denied. So why invest in Tidal now? According to reporters Moritz Scott and Davis Michelle, author’s of
“Going Broke Slowly: A Guide to Sprint’s $33 Billion Debt, as well as Tero Kuittinen, authors of “The Numbers Don’t Lie” in BGR magazine, both Sprint’s and Tidal’s numbers have been nominal as of recent. Sprint has been under scrutiny for years now due to their mediocre phone service in comparison to that of their rivals. Through this joint venture, both parties seem to hope to bring in new subscribers and higher sales rates.
Tidal’s net worth is now a whopping $600 million compared to its 2015 net worth of $250 million. Of course this major boost in Tidal’s net worth can only be attributed to the $200 million dollar deal, not the amount of subscribers Tidal is actually pulling in. Tidal’s new net worth has no relation to possible future sales and profits. And questions still abound as to how Tidal is going to be combined with Sprint users. Will these 45 million customers have free Tidal access, or will Tidal be discounted to Sprint users? Could forcing Tidal on Sprint users cause backlash rather than excitement for the app as planned?
Despite these unanswered questions, with this collaboration both parties seem to be getting what they desperately need. Sprint is getting a magnitude of promotional service by signing with Tidal, which could possibly put a dent in their current billion dollar debt, and Tidal now has Sprint’s 45 million subscribers to add to their company, which could help considerably in the process of competing with other major music streaming services like Apple Music and Spotify.