Wheelings & Dealings: Jay-Z Makes Streaming Music Play, Set to Buy WiMP

February 02, 2015
By: Steve Anderson

It's a strange new trend that features entertainers as a new source of investment revenue, and not so long ago we saw this exemplified as Dr. Dre got involved with Beats Audio, and subsequently with Apple. Now, Jay-Z is set to make a similar move, as he's making a fairly major play for ownership of a major Spotify (News - Alert) rival in WiMP.

WiMP is actually one of the biggest streaming music sources in Scandinavia, which makes it a potent rival to Spotify, and explains why Jay-Z is looking to purchase the company behind WiMP, known as Aspiro, for a hefty $56 million. Those not familiar with WiMP, meanwhile, may recognize the brand better as Tidal, which operates at last report in both the United States and the United Kingdom. While the deal isn't strictly official as yet, reports suggest that Aspiro's main shareholder has already accepted the deal, so barring some kind of calamity the deal appears to be about as done as it gets without being actually done.

Indeed, legal streaming services, at least in Norway according to one report, are having a major impact on illegal downloading. A study from MBW, which asked Norwegians if same illegally downloaded music, managed to decrease its “yes” percentage from 80 percent in 2009 to just four percent in 2014, which represents a huge drop by most any standard.

Jay-Z, speaking through company Project Panther Bidco, offered up some comment on the arrangement, noting “Panther believes that the recent developments in the entertainment industry, with the migration to music and 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.”

There will always be some degree of illegal downloading, especially given that the term itself isn't always universally applicable. Those who want an offline archive, those who want to sell bootlegs, those who don't have access to the proper connections required for streaming, and those who simply don't want to pay for such things will always be a part of the market. But when a huge quantity of music or video is made available, at a price the consumer finds reasonable without a lot of difficulty—it's even better if there's an ad-supported free version to go along with the ad-free subscription version, though problems sometimes arise if both tools are used at once—much of the pirate market simply sees no reason to carry on. There are still some reasons unaddressed, like piracy over the things that the service doesn't carry, and so on, but the end result is usually a drop, as has been seen here. It's a point that's been raised more than once; offering content that people want without a lot of headache and at a decent price point will draw attention away from piracy, because much of the reason to engage in piracy in the first place is removed from the equation.

It will be interesting to see what Jay-Z does with this new acquisition, and if he can expand the brand farther to make it compete against Spotify and Pandora (News - Alert) and the rest. But it's clear that there will be little shortage of options on hand, and that means a market with brisk competition that's ultimately good for the consumer.

Edited by Maurice Nagle