By Noor Zainab Hussain, Elizabeth Culliford, and Paresh Dave (Reuters) – Payments firm Square Inc (NYSE 🙂 agreed on Thursday to buy a majority stake in rapper Jay-Z’s music streaming service Tidal for $ 297 million in a deal that could popularize blockchain or other new approaches to storing and buying media online. Square Chief Executive Jack Dorsey, who also runs Twitter Inc (NYSE :), said in a statement that the union “comes down to a simple idea: finding new ways for artists to support their work.” Square and Tidal would work on new listening experiences “to bring fans closer together,” simple integrations for product sales and financial tools for artists, he added in a Twitter post. These new offerings could take advantage of emerging technologies like blockchain and cryptocurrencies that Dorsey sees very well, said Avivah Litan, a technology analyst at consultancy Gartner (NYSE :). “You need the apps to power the new economy,” Litan said. “Nobody is going to go looking for a cryptocurrency wallet if there is nothing to buy.” Among the shady blockchain systems Square and Tidal could help popularize are digital files known as non-fungible tokens (NFTs) that serve as digital signatures to certify who owns photos, videos, and other media online. The provenance of autographs and memorabilia could be tracked via associated NFT, Litan said, which could make them even more valuable and meaningful to fans of the artists. Dorsey has supported so-called decentralization technologies like blockchain because they allow people to store data and process transactions without relying on big tech companies and other service providers that benefit from being a gatekeeper. While companies could still develop related businesses, consumers would have more control over what they see and own online, Dorsey said at a conference last year. Martha Bennett, an analyst at consultancy Forrester, said that companies and artists already trying to sell music directly to fans through blockchain-based systems have had limited success. Tidal calls itself an artist-owned service endorsed by Kanye West, Beyoncé, Madonna, Rihanna, and Nicki Minaj, among others, and is available in more than 56 countries. It has sought to distinguish itself from Spotify (NYSE 🙂 and other rivals by committing to providing higher sound quality to listeners and a higher revenue share to artists. But it has lagged in subscribers. “When you think solely of breaking into the market, if someone with the Jay-Z and Beyonce brand can’t break the dominance of well-established streaming platforms, then who else can?” Bennett said. Square did not disclose the percentage of its ownership through the cash and stock transaction. Tidal will operate independently and existing artist shareholders will retain ownership, Square said. He added that Jay-Z, whose real name is Shawn Carter, would join his board. Jay-Z bought Tidal for approximately $ 56 million in 2015 from Norwegian businessmen.
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