View profile

Three-fifths of a streaming service

Revue
 
 

Life in a Shanty Town

March 5 · Issue #283 · View online

The hip-hop newsletter that's not afraid to ask the tough questions


Internets,
Before I join the chorus of unemployed people on Twitter praising Jay-Z’s business acumen, I need to see if he made any money on this Tidal deal.
And no I don’t need anyone to forward me an article in Forbes based on rampant speculation and insider info from former weed dealer Branson, as mentioned in many a mid ‘90s-era rap song, back when rap music was still worth a shit.
I need to see actual documents. Because I’m not convinced he made any more money selling Tidal to Square than he spent on the streaming service in the first place. This may have been a full-on fire sale.
Granted, he also received his cut of the $200 million Samsung paid for a 33% stake in the company (thus valuing the company at $600 million—I did the math) before it became clear that Tidal wouldn’t be gaining on Spotify and Apple Music.
Even that amount may not have exceeded the $56 million he paid for the company in the first place, depending on how many people he had to split it with.
I remember reading, back when Tidal launched, that Jay-Z gave each of the 16 artists who attended the Tidal launch event a 3% stake in the company, adding up to 48% of the company overall. Plus, I heard that JP Morgan Chase put up the money he used to buy the company, so “his” stake might not even be his. Er, his completely.
I wasn’t impressed by the amount of money he sold the company for either. Square reportedly paid $297 million for the streaming service, i.e. less that half of what it was said to be worth back when Samsung invested.
Dr. Dre and Jimmy Iovine, you’ll recall, received $3.2 billion from the transaction in which Apple acquired what ended up becoming Apple Music. Granted, that sale also included Beats by Dre headphones. But I heard most of that money was for the streaming service. When’s the last time you saw someone with a pair of those headphones?
Spotify, meanwhile, went public at a nearly $30 billion valuation, i.e. nearly 10 times what Apple paid for Beats Electronics, and a whopping 100 times what Square paid for Tidal.
That’s just sad.
At least Jay-Z waited until Black History Month was over to announce this shit—though he did announce it on my 40th birthday (yikes!), complete with a playlist called March 4th.
All of which raises the question, why would Square even bother with Tidal? Clearly, it’s not going anywhere. Does it even generate a profit?
When the sale was announced, it was also announced that Jay-Z is joining Square’s board of directors, and I’m thinking that might be the real reason the STL’s own Jack Dorsey cut that check—which I’m sure for him was just pocket change for him. They may have needed a diversity hire for the board, and relieving Jay-Z of this albatross may have been the cost of bringing him into the fold.
Have there been issues trying to get black people to use those Square card readers that you plug into the end of an iPhone? I know black people on Twitter are always talking about starting their own businesses, but I think that’s more so just to avoid paying income tax by putting everything on your LLC credit card.
People who sell crack could probably use a Square card reader, but that’s just asking to get locked up. Do people who sell crack even keep their phones on them while they’re at “work?” If so, the government can hear everything they say, plus track their location. If law enforcement isn’t using that information, that might be proof of a CIA plot to flood black neighborhoods with drugs.
That might be something for Jay-Z to discuss at the next Square board meeting. If he can get the Square app to disable voice recording and location tracking, some good might come of this embarrassment of a deal just yet.
Take it easy on yourself,
Bol

Did you enjoy this issue?
 
Become a member for $5 per month
Don’t miss out on the other issues by Byron Crawford
You can manage your subscription here
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue