Sprint Corp is now the proud new owner of a 33% stake in Tidal, a music-streaming service. With that acquisition it appears the fourth biggest U.S. wireless carrier is turning its attention to media streaming services in a bid to attract more customers…
By offering exclusive content not available elsewhere, through any other service provider, those users who might otherwise stream their music online with a monthly subscription or even no subscription at all might now be forced to take up a contract with Sprint in order to access the same content. Such a deal is intended to make exclusive content from Tidal available to the 45 million retail customers that Sprint already has.
Such an acquisition truly begs the question whether users care that much about streaming music. Users who cannot access content through one subscription or one service often switch seamlessly to another in search of similar music if not the very same artist.
Sprint is giving up its CEO Marcelo Claure to the Tidal Board of Directors, with majority owner Jay Z remaining onboard to run the business. Payment for such a stake came in at $200 million. Afterward, Sprint shares rose 2.8% reaching $9. 18 by 10:06 am, the highest price the company has enjoyed since June. Share prices continued to rise to 3.4 %, reaching $9.23 per share by midday.
Unfortunately, Sprint is not the first one to the streaming table, nor even the second. Sprint partnered with Tidal after it saw competitors like ATT&T Inc waive data charges for those consumers who subscribed to DirecTV Now, their online TV service. Verizon Communications Inc. offered its customers free NFL streaming and a Go90 video service. T-Mobile, one of the first to capitalize upon streaming, allowed customers to listen to Spotify and Pandora without using their data. Last year, T-Mobile added Amazon Music and ESPN Radio to that list.
Tidal, an “artist-owned” streaming service supported by Jay-Z, Kanye West, Beyonce, and Madonna offers music streaming in over fifty countries. In 2015 Jay-Z bought the company for $56 million.
After his purchase, it seems that Tidal was in need of a refreshing tidal wave, as it struggled along against Pandora, Apple, and Spotify. So severe was their need that last year the company was involved in talks with Apple who sought to buy it for the sake of boosting their Apple Music service. Samsung Electronics dabbled with the possibility of acquisition as well, once the paying customer bank exceeded 3 million. Hesitant, questioning whether Tidal would be able to retain their customers, the debates among the aforementioned left the purchasing gates wide open for Sprint. What remains to be seen is if the “artist owned” mantra of the company will now be changed as a result.