MALM�, Sweden � Sprint announced that it will buy a 33% stake in Tidal, the �high-fidelity��streaming music service owned by rapper and businessman Jay-Z and other musicians, in a deal reportedly valued at $200 million.
�The tech, telecommunications and media industries are fusing into one,� according toWired.
Sprint is promising its customers will receive �unlimited access to exclusive artist content not available anywhere else.� Tidal has fewer customers than competing services like Spotify, which claimed 40 million paid subscribers in September, and Apple Music, which boasted 20 million paid subscribers in December. �Sprint seems to be banking on the idea that even though Tidal�s exclusive arrangements with Kanye West, Radiohead, and Prince have failed to translate into a spike paid subscriptions, such premiums might be enough to get people to switch to Sprint, or at least not switch to another provider. It may well not work,� according to the same article in Wired. �But it stems from the same impulse: telcos want to buy up content companies to hedge against multiple assaults on their traditional business models.�
This deal is dwarfed by AT&T�s proposed $85.4 billion acquisition of TimeWarner, and Verizon�s $4.4 billion purchase of AOL: �While telcos� impulse to gobble up tech and media companies makes sense, it remains to be seen whether these deals will benefit them in the end. Mega-mergers have a tendency to not work out well (Time Warner�s acquisition of AOL is a prime example). Sprint�s investment in Tidal, at least, is lower stakes.��