Square Inc. has created a one-stop financial shop for coffee shops, flea markets and all manner of small merchants. Now it is trying to do the same thing for musicians, teaming up with Jay-Z’s Tidal streaming service.
The digital-payments company said Thursday it is paying $297 million in cash and stock for a majority stake in Tidal, and Jay-Z, born Shawn Carter, will join the company’s board.
The idea is to bring Square’s digital payments and money-moving services to the artists who use Mr. Carter’s streaming platform. Square—best known for its signature white card reader that plugs into phones and tablets—also lends to businesses that use its payment-processing services. Its Cash App payment app allows people to digitally store and transfer their money like they would at a bank.
“We’re interested in a 360-degree view of artists as small-business owners. Streams is just a subset of what they do,” Jesse Dorogusker, Square’s top hardware executive who will lead Tidal on an interim basis, said in an interview. He pointed to live performances, merchandise sales and collaborations that have become increasingly lucrative pieces of musicians’ businesses in recent years.
While the biggest stars have teams around them to manage finances and collect royalty streams and other income, many midlevel and smaller artists operate like entrepreneurs with fewer resources.