Square
SQ
is making a foray into the booming music-streaming space, which will help it diversify its business by exploring the opportunities in the uncharted territory.
This is evident from its latest definitive agreement to acquire a majority stake in Jay-Z’s music-streaming service called Tidal. The deal is expected to be completed in second-quarter 2021.
Notably, the service, which offers more than 70 million songs and 250,000 videos, has listeners in more than 56 countries. Further, Tidal streams original and curated content of artists, allowing them to reach their audiences and fans directly.
Also, the service streams original video series and podcasts. Further, it helps fans to build deep connections with their favorite artists.
Square has agreed to pay in a combination of stock worth $297 million and cash for the underlined acquisition.
Although Tidal will continue to operate independently post acquisition, Square intends to integrate it into its seller and Cash App ecosystems. This will expand Square’s service offerings.
Square, Inc. Price, Consensus and EPS Surprise
Square, Inc. price-consensus-eps-surprise-chart
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Square, Inc. Quote
Music-Streaming Holds Promise
The changing landscape of this data-driven world has created a unique niche for music-streaming services. Moreover, the increasing penetration of Internet and smartphone usage is fuelling the demand for such services.
Additionally, the uninterrupted access to high-quality audio files, without the need for downloading,which generally takes up time and phone memory, is a key catalyst.
Given the upbeat scenario, we believe that the music-streaming market has immense prospects.
A Statista report shows that the market is expected to generate $23.1 billion in revenues for 2021 and the figure is expected to hit $33.4 billion by 2025, witnessing a CAGR of 9.7%.
Additionally, the user penetration rate in the market is likely to hit 8.3% in 2021. The figure is expected to reach 11.6% by 2025.
We believe that Square is well-poised to capitalize on these growth opportunities on the back of its latest move.
Music-Streaming War Peps Up
Given the upbeat scenario, major companies like
Alphabet
’s
GOOGL
Google, Apple,
Amazon
AMZN
, and
Spotify
SPOT
, who are the key players in the music-streaming market currently, are leaving no stone unturned to bolster their presence in this particular space.
However, the entry of Square into the space is likely to intensify the music-streaming battle. Moreover, with Tidal, which is an artist-driven global music and entertainment platform, Square is likely to pose a serious challenge to the above-mentioned companies.
Currently, Square carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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