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Square Reportedly Discussed Buying Jay-Z’s Tidal Service

Jack Dorsey's Square reportedly has held talks to acquire rapper Jay Z's music-streaming service Tidal as part of a push to diversify outside digital payments.

Digital payment company Square  (SQ) - Get Block Inc Class A Report, run by Twitter  (TWTR) - Get Twitter, Inc. Report chief Jack Dorsey, reportedly has held talks to acquire music-streaming service Tidal as part of a push to diversify.

Citing a person familiar with the situation, Bloomberg reported that Dorsey discussed a potential deal with rapper and music mogul Jay-Z, who acquired Tidal for $56 million in early 2015. 

Tidal, which first launched in 2014, has struggled to keep pace with other streaming services, including Spotify Technology  (SPOT) - Get Spotify Technology SA Report and Apple Music  (AAPL) - Get Apple Inc. Report, both of which have become juggernauts in streaming music and content like podcasts. 

Jay-Z’s own music has been a lure for Tidal, 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.

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For its part, Square and Dorsey are no strangers to acquisitions, though a partnership of a musical kind would be a departure for Square. 

The payments company last month announced a more payment- and credit-oriented acquisition with a deal to buy Credit Karma’s tax unit for $50 million cash.

Credit Karma Tax, which provides a free do-it-yourself tax-filing service, will go into Square’s Cash App unit.

Cash App enables customers to transfer money, pay for goods and services, invest in stocks, and buy and sell bitcoin. The division has grown sharply in recent quarters.

Shares of Square were up 0.49% at $231.81 in premarket trading on Thursday. The stock has more than tripled year to date.