Jack Dorsey is so Money: What Tidal and Banking do for Square

Introduction 

The payment company Block, started by the name Square, is backed by none other than Jack Dorsey, the CEO. In the past, Jack also was the CEO of Twitter between 2015 and 2021. But this period is not his first time as the Twitter CEO as he was in the position from 2006 to 2008. Twitter was founded in 2006 by Jack alongside Ev Williams, Noah Glass, and Biz Store with Jack as their initial CEO. 

And about the company Square, Jack co-founded it in 2009 with Jim McKelvey. Square finally got its new name, Block in December 2021.

What’s going on with Tidal and Jack Dorsey’s company, Square? 

The news of the company getting a significant Tidal stake came as surprising and unexpected to many. Tidal, the Jay-Z-backed music-streaming service’s stakes were bought for $297 million.  

For a lot of artists, the news was a good one as they could now have a way to control their revenue streams by the fresh model Square was bringing – providing a better share of the streaming money. Square’s influence got more substantial than before as it now has a ‘bank’ of its own. The widely known payments company, Block – that many people continue to know as Square – has now overturned itself to become a typical bank named Square Financial Services and has chartered approval, too. 

Was Square’s deal with Tidal worth it? 

Jack Dorsey has bigger plans for his company, as it suggests joining crypto apart from banking and Tidal’s deal. As such, analysts such as Daniel Ives often compare Jack with Elon Musk’s ambitions in life. On the other side, Jack’s Tidal deal was speculated to occur due to his habit of hanging around established celebrities with his picture with Beyonce sparking more hints. 

Another veteran analyst, named Michael Dortch had his viewpoints; according to whom, what Square was doing for musicians was commendable. Square has some unique plans that can eliminate the complexities of the entertainment industry while making sure the exploitation of artists does not coexist. 

It is also true that most musicians and artists aren’t paid adequately, and neither do they receive their paychecks on time. On average, an artist only gets their payment after 3-6 months of their song being streamed. This is because the label is the priority, not the person who sang or the artist that did the most part.  

But the question is, isn’t Spotify already paying its artists? A Venrock member, David Pakman shared his opinion on the same and claimed that Square’s idea is already seen in many models, Spotify included. However, David Pakman understands that Square is trying to improve the existing system.

How is Tidal doing after Square’s deal? 

There are no official numbers of subscribers reported by Tidal as of now. But it doesn’t look like much has changed after Square and would rather require some additional time to transform the norms already set. Moreover, CD baby, a digital music wholesaler’s data has a hint for us. As per the CD baby, they distributed around 800k music from several independent artists and accounted for over 40% of revenue from Spotify alone. Apple Music also generated an 18% revenue, but Tidal is far away when compared. Tidal, alongside other third-tier services like Deezer and Napster, only accounted for 8% of what CD Baby made in revenue. 

Nevertheless, both Jack Dorsey and Jay-Z claimed that the Tidal deal was worth it. While the new ecosystem for sellers plus individuals was a success, the same strategies are ongoing for artists – as per a tweet from Jack. Jay-Z also shared his viewpoint in his tweet saying that Tidal is more than a music streaming service that aims to provide artists with better opportunities in showcasing their talents and creativity. 

What do others have to say about the Square and Tidal deal? 

Mark Mulligan who is a well-known music industry analyst from the MIDiA research said that revenue solely from streaming only is a not-so-good idea, but what Jay Z and Jack Dorsey are planning could be a better way of generating more capital. He explained how services were a nicer thing to focus on rather than the number of streams. 

Moreover, music streaming is not a sustainable way of earning as said by Cherie Hu. Her point was proved by the fact that Tidal earned $166 million from the subscription model, but also lost $52 million making it a much more non-profit kind of business. 

Summary

Jack Dorsey might be known for his brilliant corporate tactics, but he is always ready to support others in need. For example, when the COVID pandemic hit, Jack donated his 28% net worth, roughly $1 million as a relief. As for his deal with Tidal, it is only time that will reveal if it was worth the money spent. And indeed, the competition in the music industry or the entertainment industry as a whole is super tight. However, there are other mixed thoughts that this deal is outspoken or a game-changer for some. What are your thoughts on this? 

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