NME via the Wall Street Journal is reporting that Spotify has reached some unstoppable proportions: the streaming service has now an estimated net value of $8.4 billion, which is a considerable amount of money. It’s actually more than double of Pandora’s value (only $3.5 billion) and especially it is more than the revenue of the entire US music industry, estimated at $6.97 billion!
The revenue of Recording Industry Association of America includes physical and digital sales as well as streaming, which makes up 27% of these $6.97 billion, and we all know that physical sales are on the decline, although I would not have said the same thing on last week, on Record Store Day!
But the future seems definitively to belong to the streaming business if you were still doubting about it, Fortune magazine reported that Spotify saw a 53% increase in ad revenue year-over-year for the first quarter, and a saw a 380% jump in mobile advertisements.
So we have reached this paradox when streaming business worth more than the industry that provides the material to be streamed… And it’s not a surprise if others want to try the adventure, others like Jay Z who launched his own streaming version with Tidal on March 31st. However, he was not the first one in the game and it appears that Tidal may have some difficulties? Inquisitr is reporting that, only two weeks after the new service was launched, the app has already dropped out of the top 700 charts, which can’t be a good sign. I know, Tidal is just starting, but if people are not downloading the new app now, will they do it later? Tidal acquisition has made Jay Z richer, no doubt about this, and when the streaming service totally flops, he will resale it, probably for more money that he bought it, and he will be fine…
To add to the controversy, NME (and other media outlets) are also reporting that Kanye West has deleted all references to Tidal from his Twitter feed! He seemed to strongly believe in it just a few weeks ago, but Kanye wouldn’t possibly be part of a failure, his ego wouldn’t possibly envision it…. I am so tempted to quote the old adage, rats always abandon a sinking ship? Did I just compare Kanye to a rat? Is that blasphemy?