Sprint is taking a page from the playbooks of AT&T and Verizon and expanding into digital media. But in a much smaller way.
Sprint announced this morning that it has acquired one-third of Tidal, a subscription-based music-streaming service owned by Jay Z and other artists. Sprint customers will have “unlimited access” to exclusive Tidal content, the carrier said, and Sprint CEO Marcelo Claure will join Tidal’s board of directors.
Terms of the deal were not disclosed, although at least one report indicated Sprint paid $200 million for the stake.
“Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential,” Jay Z said in a prepared statement. “Marcelo understood our goal right away and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience.”
Tidal offers a two-tiered subscription service in more than 50 countries with a catalog of 42.5 million songs and 140,000 music videos. A basic ad-free service is available at $10 a month, and high-fidelity audio tier is offered at $20 a month.
The move mirrors recent efforts from Sprint’s bigger rivals to expand beyond core wireless services into digital media. Verizon bought AOL in 2015 for $4.4 billion and is pursuing millennials with its Go90 video service, while AT&T recently launched DirecTV Now and hopes to acquire Time Warner for $85 billion.
Just what the deal will mean for Sprint customers isn’t at all clear, however. Sprint’s claim of “unlimited access” appears to hint at a zero-rated offering enabling users to access Tidal content without incurring data charges—a model that all major U.S. carriers are pursuing aggressively—but the carrier declined to outline its plans to leverage its stake in Tidal. A Sprint representative said only that “news on exclusive offers and upcoming promotions from Sprint and Tidal will be unveiled soon.”
Jay Z paid $56 million for Tidal two years ago, but the Oslo-based service may be struggling to compete with more established streaming offerings such as Spotify and Pandora. Last week, a Norwegian business news outlet reported that Tidal had been inflating its subscriber numbers, and the company posted a net loss of $28 million in 2015.