Sprint will acquire 33 per cent of music streaming service Tidal in a deal which will give the operator’s 45 million retail customers unlimited access to exclusive content.
Although the statement announcing the deal described it as unprecedented, Sprint’s move is the latest in a number of content deals secured by operators in the US.
Terms of the deal weren’t disclosed but according to Music Business Worldwide (MBW), Sprint is shelling out around $200 million, which would value the music platform at $600 million.
Rapper and businessman Jay Z and other “artist-owners” will continue to run the music service while Sprint CEO Marcelo Claure will join Tidal’s board of directors.
“Sprint shares our view of revolutionising the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential,” said Jay Z, adding that Claure “understood our goal right away.”
Jay Z bought Tidal in March 2015 for $56 million from Swedish company Aspiro, giving artists and bands small stakes in the company. Tidal is available in around 52 countries, and holds a catalogue of more than 42.5 million songs and 140,000 high-quality videos.
“The innovative Tidal platform, combined with Sprint’s award-winning reliable network and best value for unlimited data, talk and text, will deliver a first-of-its-kind experience for music fans,” Sprint said.
The US operator also plans to establish a marketing fund for artists.
The music streaming market is a competitive one: rival Spotify has over 40 million paying subscribers, while Apple Music has around 17 million.
Tidal offers two tiers of monthly membership options priced $9.99 and $19.99. Both come with the same access to exclusive content, but the $19.99 tier offers the added benefit of high-fidelity sound, the company explained on its website.
In June 2016 Tidal said it had 4.2 million subscribers, but many of these may have been users who signed up for a free trial. A more conservative estimate made by MiDia Research put the figure at 1 million, and MBW said Tidal’s music subscription market share is less than 1 per cent.
Norwegian newspaper Dagens Næringsliv said Tidal may have been deliberately inflating its figures while the MBW report added a major record company source in the US said Tidal hasn’t reported any figures to the business for around six months.
What’s more, Tidal’s parent company posted a $28 million net loss in 2015.
Other examples of content deals made by operators in the US include AT&T signing an agreement with singer Taylor Swift for exclusive videos, and a deal by Verizon to stream National Football League (NFL) games.