Square Inc. has been making major investments recently to become one of the largest fintechs of the year so far. For example, this past week they announced that they will be opening up a banking platform, with limited financial capabilities, in order to gain more freedom and serve their customers in new and unique ways. For those unaware, Square Inc. is an American based fintech that is mainly known for their mobile app Cash App, which allows users to easily link their bank accounts in order to send money straight to friends, families, and even select merchants. Square’s main competitor up till this point has been PayPal, who proceeds and even beat them into the mobile transaction game with their app Venmo, but Cash App has recently surpassed Venmo in downloads and popularity. Now, Square is looking to spread their dominance by purchasing a majority stake in music streaming service Tidal for over €247 million.
This is certainly a controversial decision to make, as music streaming services are infamous for being difficult to run profitably. Even Apple Music and Spotify, the two biggest in the field at the moment, report that they have consistently lost money over the past decade. However, the point may not be to just run the service profitably, but in order to change the streaming world for artists. Right now, it’s pretty well established that not just streaming platforms are unable to run profitably, but neither are the artists who decide to put their music on, which is overall the most important part. On Spotify it’s been reported that artists are paid on average between €0.0025 and €0.0042 per stream, which averages out to about 300 streams to make one euro. Square seems to recognize this issue, along with Tidal owner Jay-Z who made it his mission to make the platform a place for artists to receive higher quality treatment than on other streaming platforms. Only recently did Jay-Z put his catalogue back on Apple and Spotify after removing it back in 2017, as a testament to not supporting either service in line with this mission.
Jack Dorsey has released a statement saying that “new ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.” It’s a bold move for sure, and hopes are up that Square and Tidal are now able to make the music streaming world a more equitable one for all.