The rapper and entrepreneur Jay Z has made a $56 million offer for the Swedish company Aspiro, the owner of two niche music services, in a deal that would give him a foothold in the rapidly expanding world of streaming music.
Jay Z’s bid, made through his company Project Panther, was revealed in a statement early Friday by Aspiro, which is publicly traded in Sweden. According to the statement, negotiations began in December, and Jay Z’s offer — representing a 59 percent premium over the stock’s closing price on Thursday — has already received preliminary acceptance by Aspiro’s board.
In addition to giving Jay Z control of Aspiro’s two services, WiMP and Tidal, the deal would likely offer an expanded profile for his entertainment and sports company, Roc Nation.
The streaming market has been growing quickly, but is already rife with competition from players like Spotify, Deezer, Rdio, Rhapsody and even YouTube. Last year, Apple paid $3 billion for Beats, the company founded by Dr. Dre and the music executive Jimmy Iovine, and it is expected to revamp its music offerings, with streaming playing a prominent role.
In a statement, a spokeswoman for Jay Z and his company gave some insight into his thinking, saying that the shift to streaming “offers great potential for increased entertainment comsumption 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.”
Jay Z’s pursuit of Aspiro may suggest an interest in what so far has remained a niche side of the digital music market: high-fidelity audio. WiMP, is available in a handful of European countries, and Tidal, which arrived in Britain and the United States in September, stream music in so-called lossless audio formats that are much higher in quality than what is offered by Spotify and most other similar outlets.
WiMP has 512,000 paying users, according to Aspiro’s most recent quarterly report; it has not said how many customers it has for Tidal, which sells subscriptions at $20 a month, twice the going rate of Spotify and most other streaming outlets.
The number of companies offering higher-quality digital audio has grown substantially recently. In addition to Tidal and WiMP, Deezer offers its Elite version through a deal with Sonos speakers; the new PonoMusic player from Neil Young recently went on sale; and Sony has been drawing attention for its high-resolution new Walkman, at prices over $1,000. But analysts say that for the most part, consumers have shown little interest in these products.
For Jay Z, whose real name is Shawn Carter, another attraction in buying a streaming service might be to further expand the media portfolio of Roc Nation. Started in 2008 as a joint venture with Live Nation Entertainment, the company already operates in a number of areas in music, covering recordings, music publishing and artist management, and in 2013, it alsoexpanded into representing top athletes through its Roc Nation Sports division.