None of the stand-alone streaming services will survive on their own, except for those in two categories:
Streaming as a feature for a larger offering (Apple, Amazon, Google)
Niche streaming for folks willing to pay $$$ for the catalog (e.g. Naxos - maybe?)
I was hoping that TIDAL could fall into #2 with a large catalog, a video offering and higher quality streaming music (i.e. Redbook and MQA). The Millennials I work with don’t understand or care about lossless vs lossy music. So, TIDAL will have to either educate a younger market (that takes a lot of cash and panache) or seriously up-charge for the audiophile privilege.
I’m stating the obvious, but Apple doesn’t have to make money at this; their juice is drawing you into buying high-margin hardware. There are similar talking points for Amazon and Google.
Spotify is the largest subscription music streaming service with 140 million subscribers. Despite posting good growth numbers, their annual operating loss is estimated to be in the hundreds of millions of dollars.
My concern is it will be the big 3 in the end, Google, Apple and Amazon. Depressing as it will be like how the industry used to be with the major labels deciding on things and whats worth listening to.
I could see Sony buying TIDAL. They failed at their own streaming music business and are licensing Spotify for their Playstation platform. But Spotify has a valuation now above 20 billion $US. Way too rich for acquisition by Sony.
TIDAL needs a big brother with a larger strategy. The H/W side of Sony’s business is really pushing the hi-res mantra. Their expensive Walkman DAPs now support MQA decoding and they share the same total addressable market for TIDAL - Audiophools. If you haven’t heard one of their newer Walkmans, I think you would be surprised how good they sound.
And, TIDAL would probably sell itself to Sony for a lot less than the 600M valuation set when they took money from Sprint/SoftBank. I have to believe that Jay-Z is looking for an exit strategy. Their refusal to publish subscriber numbers doesn’t bode well for Tidal’s longevity.
Not sure I want a big music player having full control of a music service. It could easily end up being just an outlet for their own music output. Its something I can see coming though in the future for the industry as a wholw now that they can see streaming is here to stay they will want to moniterise more. The big music labels will end up scooping up the streaming services for their own game without the big investment in infrastructure etc as the hard works been done and slowly move it to only their own output. Same things happening in video streaming, Disney are going for streaming big time to control all their content and pulling it from all the others such as Netflix.
Why do people so frequently confuse a public listing with a payday? In most situations any money raised in the listing goes to the company, not the stockholders, particularly when the Company is still producing losses. If it continues producing losses, the stock might decline dramatically from its listing price before significant stockholders can sell (particularly if they are subject to lockup agreements). Let’s see what Spotify is worth when the lockups come off.
This is not a typical IPO where the company is selling shares for its account and the other shareholders are locked up from selling. The only shares being sold to the public are by the Registered Shareholders, mainly management and TCV, the venture firm. The company gets none of the sale proceeds. Sony is not getting its shares registered for public resale so indeed they will need to bleed them out over time. I agree that for Sony, this is not an overnight cash in pocket deal. JCR
Thanks, quite interesting. Since it is not an unwritten offering, all this is doing is registering the shares so that they may be sold in the open market as listed. I wonder whether the Company is being forced into this through the exercise of registration rights by some of these holders? Will also be interesting to see what daily volume develops and how many shares that permits to actually be sold in any given period.