Jay Z is expanding in music streaming to take on Spotify Ltd. and Apple Inc.’s Beats.
The rapper’s holding company S. Carter Enterprises LLC agreed to buy Aspiro AB, the maker of the Wimp and Tidal music services, for $56 million, according to statements from the companies today. The bid by Jay Z, whose real name is Shawn Carter, led to a 58 percent jump in Aspiro’s share price in Stockholm.
The takeover is the latest business venture for Jay Z, who has invested in a record label, restaurants, clothing, a talent agency and champagne. He’s one of several rap stars who have leveraged their celebrity to become entrepreneurs. Andre “Dr. Dre” Young sold his Beats headphones and streaming brand to Apple last year for $3 billion.
Competition in music streaming is intense. Spotify, the Stockholm-based Internet and mobile music service, has more than 15 million paying subscribers, while the Beats purchase represented Apple’s biggest-ever acquisition. Aspiro’s Wimp offers audio and a multimedia service with editorial, magazine and video content.
The evolution of the entertainment industry and shift to music and media streaming offers “great potential for increased entertainment consumption and an opportunity for artists to further promote their music,” Jay Z’s company said.
“Aspiro needs substantial expansion capital and a strong and dedicated owner to be able to grow and compete on the global music streaming market,” said Trond Berger, chief financial officer of Schibsted ASA, the media company that controls Aspiro.
Wimp had 512,000 paying users at the end of September, Aspiro said last year. The stock had gained 20 percent in the last year, before today’s bid.