Jay-Z's streaming company gets a cash injection as Apple and Spotify pull away
Tidal, the music streaming service owned by hip hop star Jay-Z, has sold one third of its shares to the US mobile operator, Sprint for up to $200m, according to reports overnight from the US (more on that number later).
He bought Tidal for $56m two years ago but, despite the support and endorsement of high profile artists such as Beyonce, Madonna, Daft Punk and Arcade Fire (who are all also minority shareholders in the company) it has failed to keep pace with the growth of larger competitors such as Spotify and Apple Music.
Tidal reports to have about 3 million subscribers while Spotify and Apple have passed the 40 million and 20 million user milestones.
The small print
The full details of the deal have not been released - but it is likely to give a lifeline to the service.
Spirit has a user base of 45 million customers. Like Tidal - it has fallen behind its main competitors in a highly competitive market. This means that tie-ins between the two services will be likely to help both companies.
It has been speculated that the operator could offer extra exclusive content to its users.
Exclusivity is already Tidal's main selling point. Some of the most successful albums of 2016 were released exclusively through the company including releases from Beyonce, Kanye West, Rhianna, and Drake.
If this is the tactic - it will be interesting to see if it is willing to risk alienating non-Spirit users (at a time when it badly need subscribers) by offering worthwhile releases to its customers only.
The $200m figure associated with this deal comes from a report from Music Business Worldwide - it remains unconfirmed.
This would make the company worth almost six times what Jay-Z paid - despite the fact that it has struggled to excite music fans.
Tidal booked a loss of $28m in 2015 - almost three times the 2014 loss.
In has been involved in legal action with the company's previous owners. Jay-Z and Co' say that they were quoted over-inflated user numbers when they bought the company.
Journalists in Norway are alleging that the current '3 million' paying users figure could also be overstating its popularity and that it actually has less than 1 million.
Samsung was linked with a $100m Tidal takeover last year - Apple was also connected with a move to buy the company in 2016.
Tidal's premium HiFi offering costs €19.99 across Europe - with the basic premium package priced at €9.99, the same price as Apple Music and Spotify.