And you thought this was going to be a battle between Spotify and Apple? Not so fast: it now looks like two very substantial streaming European upstarts are seriously entertaining the cross-Atlantic hop, a development that would create a stepped-up level of competitiveness and expertise in the lucrative US market. And, an all-out war for early streaming accounts, right as the market is poised to expand.
A pair of European sources are pointing to WiMP, owned by Aspiro, a name that means nothing to Americans but has a major presence in countries like Germany, Sweden, Norway, and Denmark. Back in the day, WiMP started in ringtones, then shifted to on-demand streaming, and now claims a noticeable 350,000 paying subscribers and a billion cumulative streams across its initial country spread. This is a company with lots of experience, particularly over mobile and TV channels but also online.
Next on WiMP's list is Poland, though the company is coyly pointing to a second expansion country 'outside of Europe'. Aspiro declined to specifically discuss any American plans with Digital Music News, but left the door wide open by vaguely pointing to ex-European expansion plans.
All of which could mean more good news for major labels, who are exacting gigantic tolls and demanding ownership shares for stateside entry. A sober business school graduate would run fast, but it looks like this is a game Aspiro is willing to entertain. "Aspiro is continuing to work for growth and to launch new services, primarily WiMP in more countries," Aspiro CEO Gunnar Sellæg explained. "With our owner also entrusting us through the ongoing rights issue, we see good prospects of realizing the company's potential."
The other big name to watch is Deezer, a company making big waves in its home country of France and aggressively expanding towards the rest of the world. So far, Deezer CEO Axel Dauchez has been expressly avoiding the US (and Japan), based on the guaranteed licensing nightmare and financial quagmires involved. The strategy is to create a powerful patchwork of smaller countries, but that could change with a rumored investment by Warner Music Group owner Len Blavatnik. The Russian billionaire certainly has funny money to throw around on speculative music startups, but more importantly, he also controls the WMG catalog. And, depending on the outcome in the planned purchase of EMI by Universal Music Group, potentially a lot more.
But wait: regulators are expected to approve the Universal purchase, according to our sources, despite wringing endless concessions and forcing endless delays for the nod. And UMG appears ready to sign on the dotted line, despite a list of regulatory demands that are making this deal look financially stupid. Which means an approval would keep EMI from WMG, but potentially impose lots of restrictions on Universal's ability to completely block digital licensing grants based on expressed concerns of regulators and lawmakers in both America and the EU.
Which also means, Deezer could waltz into the US with a far lighter licensing load than Spotify. It's a structure that could make all the difference for a more scrappy, less-funded startup.
Which brings us to Apple, the 800,000+ pound gorilla that could devour all of these lunches overnight. As iCloud and iTunes Match grow, the prevailing thought is that the oft-late-moving Apple could elbow into on-demand streaming when it makes sense, and simply overpower the likes of Spotify with far greater marketing power, well-entrenched customer loyalty, a physical retail sprawl, and far friendlier artist and even label relationships.
The question is who becomes roadkill in this great American streaming race. Rhapsody is a veteran boxer with more than a million subscribers, though Spotify's swelling pocketbook continues to cast a long and deep shadow. Others like Rdio and MOG seem totally marginalized for various reasons, though the acquisition of MOG by Beats Electronics could potentially change that underachieving profile.
More as it develops.
Romper Room Thursday, August 09, 2012
Last picture says it all, this is just a bubble waiting to happen then spill into the abyss. The other guys can leverage their way in then crash when there isn't enough demand to sustain.
Joda Thursday, August 09, 2012
The long term viability of pure play streming services is next to nil. It's all just a
At the end of the day the game will be controlled by, much as you said, the larger companies such as Apple that are already a major part of the potential market's lives.
Of the companies that are around today I'd only expect the digita radio services such as Pandora & iHeartRadio (Poleman is doing a great job) to stick around.
Any company that isn't known for purely streaming radio will have their lunch eaten by the big guns whenever they come to the party. And it WILL happen.
Casey Thursday, August 09, 2012
Apple won't step in until they see that they can make a massive profit. If musicians think they are getting screwed now, they have a lot to learn.
Casey Thursday, August 09, 2012
WiMP won't make much of an impact. Neither will Deezer. I am shocked by how many people forget Deezer was already here. And it was completely free and completely tanked.
There are enough services in the market that a few extra won't make much of a difference.
Bizinsider Friday, August 10, 2012
WIMP is also backed by Telenor, a massive company even by US standards. However their Subscribers are hardly avtive at all and that is because the subscribers often do not even know they are customers because they ge tthe service bundled with internet and cable tv without asking for it.