Jay Z

Jay Z looks at the NFL season opening game between the Dallas Cowboys and New York Jets at MetLife Stadium on September 11, 2011 in East Rutherford, New Jersey. 

 Joe Robbins/Getty Images

Jay Z should close the deal on Aspiro, the company behind streaming services WiMP and Tidal. Few artists or executives could bring more value to a music streaming company that's trying to gain a foothold in a growing market.

Reports say Jay Z will pay $56 million for Aspiro. That's slightly more than half the reported $100 million Deezer paid for Muve Music, which had over 2 million subscribers, and far more than the $14 million Beats Electronics paid for Mog, which was effectively the backbone for Beats Music.

It's a good price. WiMP had around 512k subscribers at end of Q3, according to an Aspiro investor presentation. (Tidal hadn't launched yet). That works out to $109 per subscriber -- less than one year of revenue at $10 a month. That's bargain compared to comparable digital subscription services. Netflix currently has a $455 enterprise value-to-subscriber ratio. SiriusXM Radio has a $894 EV-to-subscriber ratio. Spotify's EV-to-subscriber ratio is $667 at a $4 billion valuation, at which it raised money last year, and $957 at the $5.7 billion valuation placed on the company by Manhattan Venture Research.

There are only two ways to get a streaming service -- buy it or build it -- and buying a top service would be cost prohibitive. Other than building from scratch, the other option is to buy a less expensive service and build it into a large, more competitive business.

Jay Z can follow the example of Beats Music: Jimmy Iovine and Dr. Dre revamped a streaming service and added the value of the Beats be Dr. Dre brand. Similarly, Jay Z could add tremendous value to WiMP and Tidal with his person brand. He can do this in two key areas: awareness and content.

The two services would immediately benefit from being associated with one of the world's best-known musicians and music executives. Between Jay Z, his wife (Beyonce), the musicians Roc Nation is associated with (Calvin Harris, Rihanna, others) and athletes signed to his sports management agency (Kevin Durant, Robinson Cano, others), along with the various Roc Nation partners (Three Six Zero Group, Skull Candy), there are a dizzying number of opportunities to raise awareness of and promote the services.

Jay Z could also differentiate WiMP and Tidal by offering exclusive content not available at competing download stores or streaming services. If done in a creative fashion, as Jay Z did with Samsung for Magna Carta....Holy Grail and Beyonce did with iTunes for Beyonce, such releases could benefit both service and artist.

There are some question marks in the deal. Is Jay Z interested in Tidal for its emphasis on high-definition audio or does he simply want a streaming service with a footprint on two continents? Does Jay Z find a partner -- Samsung comes to mind -- to help with customer acquisition? And is this a long-term investment or an opportunity to grow value and sell at a large profit?

There's no guarantee the Beats Music formula will work for Jay Z. He would be fighting against Spotify, Deezer, YouTube, Pandora, Beats Music and a host of other services. The slow growth of Beats Music has proven a top-shelf brand and the involvement of celebrity musicians aren't drivers of subscriptions. And it's difficult to say what will become of the paid-only subscription model given the proven success Spotify is having with the two-tier, freemium model.

Buying Aspiro would be a risk. But it would be an acquisition with tremendous upside and potential to turn a modest streaming company into an opportunity to have a stake in whatever the future of recorded music will become. That alone is worth $56 million.