Jay-Z rapper mogul bids $56m for the Aspiro streaming-music service
Interesting moves are happening in the streaming music app space where the likes of Spotify, Pandora and Apple hold considerable sway in the market for music on the go.
Jay-Z, the rapper come mogul (real name Shawn Carter) whose business success and successful association to singer Beyonce are well known, is branching out into new competitive fields. Project Panther Bidco Ltd, which is owned and controlled by Jay-Z, has placed a bid of approximately $56 million for the Scandinavian music streaming company Aspiro. Schibsted, the Norwegian media group, have acknowledged the bid and with its board already accepted it. Negotiations began in December and the final price presents a steep 59 percent premium over the closing price on the stock.
In a public statement to Reuters, the music mogul said that he's been watching the company for a while and felt it was “innovative” with “strong growth potential”.
These may seek like unusual terms for a singer to use, but Jay-Z has actually met with billionaire investor Warren Buffett and discussed investing and other topics at length before. So the idea of strong future growth may not even have come from him but has its impetus in Buffett's thinking which is rubbing off on the mogul.
Two Streaming Services
Aspiro actually has two streaming audio services rather than the one. WiMP is the first one which offers distributed music content within European borders. The other is Tidal which specialized in high definition audio content distribution in the U.S., Canada, the U.K., Ireland, the Netherlands, Belgium, Finland and Luxembourg.
Tidal has its own catalog of 25 million songs, plus 75,000 HD music videos which are currently ad free. There is also editorial media content as well.
Streaming Music On The Rise
With the improved internet speeds available for mobile devices, it is becoming easier for people around the world to use apps and music services like Spotify, Slacker, Rhapsody, Rdio, Deezer, YouTube, and others.
Apple's recent acquisition of BEATS for $3 billion from Dr. Dre and Jimmy Iovine to tap into the desire for high quality audio listening technology only stresses the increased emphasis on mobile access to HD audio and HD audio listening equipment.
Lossless Streaming
Unlike some other streaming services, both the WiMP and TIDAL streaming services from Aspiro stream lossless audio versions of tracks. This means that the tracks have not been compressed in a way that reduces audio quality. Just WiMP alone has 512,000 users who pay a subscriptions. TIDAL sells monthly subscriptions for $20 a month which is double what Spotify commands highlighting that customers will pay more for lossless content and mobile access to media.
Future Expansion
A spokeswoman for Jay-Z's Carter Enterprises, told the New York Times Newspaper that there was “great potential for increased entertainment consumption” and to bring the brand out to a global marketplace.
It was also pointed out that the streaming services that Aspiro offers represent a new distribution opportunity for artists. Something that artists like Taylor Swift may be paying attention to have made life more difficult for Spotify recently by removing her tracks from their streaming service.
Other services like Spotify still see expansion ahead and a future initial public listing. It $500 million. The Wall Street Journal reported on Thursday that Spotify hired Goldman Sachs recently to help raise $500 million ahead of a planned IPO in 12 months. Other past competitors like the Sony Music Unlimited and Muve from AT&T were recently shutdown, so it is a tough market to succeed in.
