Rabu, 02 Juli 2014

Google Buys Its Way Deeper Into Music for a Song(za) - Here’s Why

Digital music wars continue to escalate.  Apple/Beats (bought for $3 billion).  Amazon Prime Music (recently launched).  Samsung/Slacker (major strategic partnership).  YouTube Music (coming soon to a smart phone near you).

And now Google itself, announcing yesterday that it has acquired curated digital radio service Songza -- something previously rumored and something I just predicted last week when I wrote:

The M&A market will heat up again soon -- and don’t be surprised if the next major move is Google swallowing up Songza.

Initial reports when the Google/Songza news first surfaced indicated a price tag of $15 million.  But, due to an apparent wealth of suitors following initial rumors, Songza was picked up for significantly more -- music to its investors ears, since the start-up (which I use regularly) had only raised $1.5 million to date.  

Expect more M&A in this white hot space in the next several months, precisely because it is increasingly daunting for stand-alone privately-held services like Spotify, Pandora, Rdio, 8tracks, and Slacker to compete and profit amidst these gorillas (here is last week’s analysis about that very issue).  One obvious move would be for Samsung to buy its Milk Music partner Slacker.

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