Apple Inc. (NASDAQ:AAPL) is in initial talks to buy rap mogul Jay Z’s Tidal streaming music service, claimed The Wall Street Journal on Thursday. A Tidal spokesman, however, denied having any talks with the iPhone maker, the newspaper added. As of now, there has been no comment on the matter from Apple.
Apple must buy Tidal
If the deal occurs, it would radically reshape an online music market in which Apple trails Spotify, industry analysts say.
Analyst Bob Lefsetz told USA TODAY, “I would be surprised if this doesn’t happen. First and foremost, Tidal has very limited options. Jay Z bought it to sell it and who’s going to buy it? Amazon is the only other option and it’s going in a different direction.”
Lefsetz says there is huge encouragement for Apple to buy Tidal as it is at war with the market leader Spotify.
According to Re/code, when Spotify accused the iPhone maker of blocking a new version of its iPhone app this week, their simmering rivalry reached a boiling point. On June 26 in a letter to Apple General Counsel Bruce Sewell, Spotify’s General Counsel, Horacio Gutierrez, wrote that this latest episode raises serious concerns under EU and U.S. competition laws.
“It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music,” Gutierrez wrote.
All to beat Spotify
The report of a potential deal follows the announcement of Apple’s partnership with NASA on the eve of the Juno mission. NASA will be sending back sounds of space so that artists can make music with the sounds, which will then be featured on iTunes and Apple Music. On Thursday, the iPhone making giant posted a Destination Jupiter page on iTunes. It will have songs inspired by the mission from Trent Reznor, Corrine Bailey Rae, Brad Paisley and others.
At its June Worldwide Developers Conference, the tech giant unveiled a redesign of its music service a year after it launched to make it simpler to navigate. In 2014, the Cupertino-based firm acquired Beats Music for $3 billion. Currently, the smartphone maker has 15 million paid subscribers but lags market leader Spotify with 30 million subscribers.
Jay Z acquired Tidal last year for $56 million. During a star-studded event featuring his wife Beyonce, Madonna and Kanye West, he released the streaming service. It had 3 million subscribers as of March.