Square Inc., the digital-payment company run by Jack Dorsey, has held talks to acquire the music-streaming service Tidal as part of a push to diversify, according to a person familiar with the situation.
Dorsey has discussed a potential deal with Jay-Z, the rapper and music mogul who acquired Tidal for $56 million in early 2015, said the person, who asked not to be identified because the talks were private. The negotiations may not result in a transaction.
Square declined to comment, while Tidal didn’t respond to requests for comment.
Square’s shares were little changed at $230.77 as of 9:58 a.m. in New York. Through Wednesday, they had surged 270% this year.
Tidal, which first launched in 2014, has struggled to keep pace with other streaming services, including Spotify Technology SA and Apple Music. Jay-Z’s own music has been a lure for the platform, but he put his songs back on Spotify last year — raising questions about the health of Tidal. The closely held service hasn’t reported subscriber figures since saying it had 3 million paying customers in 2016.
Dorsey, meanwhile, has ambitions to build Square into a much broader company made up of stand-alone, complimentary services. Square’s two core products, Square Seller and Cash App, already operate somewhat separately within Square Inc., each with its own “lead” on the executive team. It’s believed Dorsey, who spent more than four years on the board of Walt Disney Co., imagines Square will similarly own a collection of businesses under one corporate umbrella.
Dorsey was photographed in August in the Hamptons with Jay-Z and his wife, Beyoncé, and then again in December with the power couple and actor Sean Penn on a beach in Hawaii.
Tidal’s owners include nearly two dozen high-profile artists, including Beyoncé, Alicia Keys, Coldplay, Madonna, Rihanna and others, according to its website. The service is available in 53 countries and offers more than 60 million songs and 250,000 videos.
The service has attempted to use its star power to offer experiences that complement its music. That includes a Rihanna runway show in Paris that was streamed for Tidal members, as well as charity concerts by Jay-Z and Beyoncé.
–By Lucas Shaw and Kurt Wagner, with assistance from Scott Moritz.