The acquisition of Beats Music made Spotify a prime sales target for other companies that want to gain leverage in the streaming business. It has been rumored that Microsoft, Google and Amazon are interested in purchasing Spotify for as much as $10 Billion. These mega-companies all share the same problem…they have failing streaming services. Google’s Play Music All Access is under used, Amazon’s Prime Music and Fire TV have just started up, in a time where downloading is fading fast. These three companies are trying to have hardware applications for the car, like Ford’s Sync, Apple’s CarPlay and Google’s Auto Link. The purchase of Spotify would be crucial to the future success of these endeavors.
Spotify is a very attractive buy with 10 million paying subscribers and 40 million active users. It’s a no brainer why these companies would want to acquire Spotify.
Telecommunication companies are stepping up to the plate, but this idea may not be sustainable. Most of these companies already have their own music applications. AT&T teamed up with Beats Music and Sprint teamed up with Spotify, by doing this they have a competitive advantage on other carriers.
The motivation for Spotify to sell comes heavily from the investors and stakeholders, which consist of the major labels. They seem in a rush to bail out of the investment that was made in Spotify. Maybe the investors know the true faith of the streaming services and see no potential for profitability. Spotify would be foolish not to close a deal with one of these companies, while the window of opportunity is open to make a multi-billion dollar deal. Spotify cannot stand alone as a streaming service, they must sell and leech on to another company. Streaming is an unsustainable business model…they will eventually sink.
In the case that Spotify does sell to Microsoft, Google or Amazon then the music industry is truly doomed. The deal would make an unstoppable powerhouse that the music industry could not compete with. The reason being these companies have the ability to make Spotify available on the cell phone, in the car and at your home or anywhere that has WIFI access for your laptop/tablet. This would drive the demand for music down to an all time low. The consumer would have an overwhelming amount of music at their fingertips. No one would buy music anymore, the music industry game, as we know it.