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Business

Jay Z Gets Into Streaming With $56 Million Bid for Spotify Rival

By Andrew Flanagan
1/30/2015
By Andrew Flanagan
1/30/2015
Jay Z
Nigel Waldron/WireImage

Jay Z performs on stage at Oslo Spektrum during his Magna Carter World Tour 2013 on October 23, 2013 in Oslo, Norway.

Jay Z has set his sights on buying Aspiro, the Swedish parent company of two subscription streaming services, WiMP and TIDAL. The offer of 464 million Swedish krona, or $56.2 million, represents a 59.1 percent premium over yesterday's closing share price. It was announced by Aspiro early this morning and has already been accepted. Trading of Aspiro stock was up 76 percent on the news this morning, to 0.08 per share.

The proposed acquisition is being made via the mogul's Project Panther Bidco, a subsidiary of his S. Carter Enterprises, and is still subject to shareholder approval. A spokesperson said Panther's "strategic ambition" for Aspiro is to expand and up-scale its technology and services. The full statement from the rep is below:

Project Panther Bidco, Ltd ("Panther"), an entity controlled by S. Carter Enterprises, LLC ("SCE") is pursuing a possible acquisition of Aspiro AB ("Aspiro"), based in Sweden. Aspiro is a media technology company in the forefront of the ongoing redefinition of music consumption. Through the subscription services WiMP and TIDAL, Aspiro offers a complete experience of higher HiFi quality. The platform encompasses audio, video and integrated editorial features. 

Artist Mentioned

Panther believes that the recent developments in the entertainment industry, with the migration to media streaming, offers great potential for increased entertainment consumption and an opportunity for artists to further promote their music. Panther's strategic ambition revolves around global expansion and up-scaling of Aspiro's platform, technology and services.

The acquisition is subject to shareholder approval. As such there is no guaranty that a transaction will take place.

On its website, WiMP offers editorial recommendations through "local editorial teams in each country," which may signal a plan to integrate Jay Z's culture site Life and Times into its platform. The company also operates a video syndication platform RADR Music, which provides music videos and live performance footage to "online media enterprises." (As opposed to YouTube.)

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WiMP was launched in 2011, ostensibly as a competitor to Spotify, though the company hasn't been able to keep pace with Daniel Ek's now-ubiquitous service. Aspiro's last financial filing lists it as having 512,000 paying subscribers, compared to Spotify's 15 million paying subscribers. Not to mention the soon-to-be-relaunched Beats, which Apple purchased for $3 billion last year.

TIDAL, a premium service geared towards audiophiles, calls itself the "first music streaming service that combines the best High Fidelity sound quality, High Definition music videos and expertly Curated Editorial."

Streaming continues to displace purchased music downloads, with track and album download sales dropping 12.5 percent and 9.4 percent, respectively, in 2014. Compare that to streaming, where SEA (streaming equivalent albums, or 1,500 streams of a record) were up by 56 million last year.

Despite the fact that no on-demand streaming company has yet to turn a profit -- it's clear which way the wind is blowing, and Jay Z now has a kite to play with.

By Andrew Flanagan
1/30/2015

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