It’s a good day if you like streaming music surprises: Jay Z is buying Aspiro, the Scandinavian company behind streaming services WiMP and Tidal.
Project Panther, a company owned by the rapper’s S. Carter Enterprises, has tabled a bid of $56m for the company.
The offer has been recommended to shareholders by Aspiro’s board of directors, and the largest of those shareholders – media group Schibsted, which owns 75% of Aspiro – has already accepted.
WiMP, which competes with Spotify across Scandinavia, had 512,000 paying subscribers at the end of September 2014, according to Aspiro. 20,000 of those were paying for its WiMP HiFi lossless service, which was renamed Tidal for its US and UK launch the following month.
However, Schibsted appears to have decided that another owner would be better placed to take Aspiro’s services forward, at a time when the streaming market is intensely competitive.
“Panther, indirectly owned by SCE and controlled by Shawn Carter, possesses the proprietary relationships, industry knowledge, as well as economic strength and the necessary commitment in order to realise Aspiro’s strategic plan of expanding the Company’s business and brand globally,” said the Independent Bid Committee from Aspiro’s board of directors, in a statement.
“Aspiro needs substantial expansion capital and a strong and dedicated owner to be able to grow and compete on the global music streaming market,” added Schibsted’s chief financial officer Trond Berger.
“Panther, which is controlled by S. Carter Enterprises, LLC, has adequate financial resources and a high level of competence in the music industry. Hence, I think they will be a better owner to lift Aspiro and its advanced music streaming service to a new level.”
The acquisition has yet to complete, although the approval of Aspiro’s board and its parent company bodes well for a speedy closure of the deal. Then we’ll find out what Jay Z has planned for WiMP and Tidal.
The inevitable comparison will be to Beats Music, the streaming service founded by another hip-hop heavyweight – Dr Dre – and subsequently sold to Apple as part of a $3bn deal for his Beats Electronics. WiMP has more paying users than Beats Music did at the time of that acquisition – although obviously it’s lacking the massively-lucrative headphones business angle.
It remains to be seen what kind of financial backing Jay Z and Project Panther – incorporated in the UK in December – has to take Aspiro’s services forward, though. Apple has a cash mountain, Spotify is raising $500m of new funding, and the other 900lb gorilla in the streaming market is Google / YouTube, which has plenty of resources too.
Can Jay Z and his partners muster the financial muscle to compete? Will this mean a speedier global rollout for Tidal? And just how awkward will the breakfast-table conversation be chez Carter if Beyoncé does another exclusive iTunes deal for her next album? 2015, which was already shaping up as a momentous year for digital music, just got even more intriguing.