Apple Inc. (AAPL - Free Report) is reportedly in talks to acquire rapper and mogul Jay Z’s music streaming service Tidal, according to the Wall Street Journal. The Journal cites people familiar with the matter, who said that deal talks are ongoing. Jay Z bought Tidal in 2015 for $56 million from Swedish company Aspiro.
It appears that Apple is exploring the idea in order to boost its Apple Music streaming service, as Tidal has strong ties with artists like Kanye West, Beyoncé, Rihanna, and Madonna. West, Beyoncé, and Rihanna all released their latest albums—The Life of Pablo, Lemonade, and Anti, respectively—on Tidal exclusively, at least for the first few weeks.
At first look, it doesn’t seem that a Tidal acquisition is the smartest business move for Apple. Recently, the company has experienced abrupt changes in management, going through three chief executives in less than a year, with one being interim and one appointed by previous management. Former chief business officer of SoundCloud Jeff Toig has held the CEO position since January. Tidal is also dealing with some lawsuits concerning artist royalties and exclusivity deals.
However, when you look back at Apple’s purchase of Beats, a Tidal acquisition starts to make sense. In 2014, the tech giant shelled out a whopping $3 billion to buy Beats, a luxe headphone maker and streaming music service founded by hip-hop producer Dr. Dre. The streaming service essentially turned into Apple Music, but Apple also got valuable music industry knowledge and connections—in addition to Dr. Dre, legendary music mogul Jimmy Iovine—with the deal.
If Apple were to make a bid for Tidal, the company wouldn’t have to face that much competition. Samsung , who after months of rumored talks, backed away from a potential deal to buy the service, and Spotify, another streaming giant, most likely can’t afford such a takeover. Alphabet Inc.’s (GOOGL - Free Report) Google division would be the next logical buyer if Apple passes, as their streaming music service would benefit from Tidal’s coveted library (Tidal is the only service to have the bulk of late music icon Prince’s expansive catalogue).
But Apple may want to hold off on any talks of buying Tidal for the moment. Spotify has recently gone public with accusations, in a letter from its general counsel Horacio Gutierrez, claiming that Apple is “’causing grave harm to Spotify and its customers’ by rejecting an update to Spotify’s iOS app,” according to Recode. This could possibly lead to antitrust activity, so it may be in Apple’s best interest to lay low and dodge what appears to be a consolidating move of the streaming industry.
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Apple Inc. (AAPL - Free Report) is reportedly in talks to acquire rapper and mogul Jay Z’s music streaming service Tidal, according to the Wall Street Journal. The Journal cites people familiar with the matter, who said that deal talks are ongoing. Jay Z bought Tidal in 2015 for $56 million from Swedish company Aspiro.
It appears that Apple is exploring the idea in order to boost its Apple Music streaming service, as Tidal has strong ties with artists like Kanye West, Beyoncé, Rihanna, and Madonna. West, Beyoncé, and Rihanna all released their latest albums—The Life of Pablo, Lemonade, and Anti, respectively—on Tidal exclusively, at least for the first few weeks.
At first look, it doesn’t seem that a Tidal acquisition is the smartest business move for Apple. Recently, the company has experienced abrupt changes in management, going through three chief executives in less than a year, with one being interim and one appointed by previous management. Former chief business officer of SoundCloud Jeff Toig has held the CEO position since January. Tidal is also dealing with some lawsuits concerning artist royalties and exclusivity deals.
However, when you look back at Apple’s purchase of Beats, a Tidal acquisition starts to make sense. In 2014, the tech giant shelled out a whopping $3 billion to buy Beats, a luxe headphone maker and streaming music service founded by hip-hop producer Dr. Dre. The streaming service essentially turned into Apple Music, but Apple also got valuable music industry knowledge and connections—in addition to Dr. Dre, legendary music mogul Jimmy Iovine—with the deal.
If Apple were to make a bid for Tidal, the company wouldn’t have to face that much competition. Samsung , who after months of rumored talks, backed away from a potential deal to buy the service, and Spotify, another streaming giant, most likely can’t afford such a takeover. Alphabet Inc.’s (GOOGL - Free Report) Google division would be the next logical buyer if Apple passes, as their streaming music service would benefit from Tidal’s coveted library (Tidal is the only service to have the bulk of late music icon Prince’s expansive catalogue).
But Apple may want to hold off on any talks of buying Tidal for the moment. Spotify has recently gone public with accusations, in a letter from its general counsel Horacio Gutierrez, claiming that Apple is “’causing grave harm to Spotify and its customers’ by rejecting an update to Spotify’s iOS app,” according to Recode. This could possibly lead to antitrust activity, so it may be in Apple’s best interest to lay low and dodge what appears to be a consolidating move of the streaming industry.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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