SoStereo's Hantzley Audate keeps you up to speed on all the music industry news you missed last week. Yeah, we kind of bit the John Oliver title, but hey we like him so it's a sign of affection. Here are some of the stories shaking up the music business from last week.
The Robin Hood Of Music
Music tech startup, Stem, hit it big in their latest Series A fundraising round, raising $8MM, bringing the total amount raised to $12.5 million. The founders of Stem are building a new kind of distribution service that ensures artists and collaborators get paid for their work by streamlining tracking and payments to artists across a variety of digital services such as Spotify, Youtube, Apple Music, Pandora and more. So far, they’ve been off to a great start, boasting a roster of satisfied users such as Frank Ocean, Childish Gambino, DJ Jazzy Jeff, Anna Wise, Chromatics and more. Keep an eye out for this company becoming a player in the distribution space.
SiriusXM eyes acquisition of Pandora Radio
Pandora, one of the largest music streaming platforms in the world, is mulling over a sale to SiriusXM for approximately $2.8 Billion. As confirmed by The New York Post on May 17, the deal has been in limbo for months. SiriusXM is having active conversations about an acquisition of Pandora, and sources say SiriusXM has been conducting due diligence on Pandora for the past few weeks.
“There is a very high likelihood that something happens in the next week to 10 days but you just never know…” a source close to talks said. “It makes sense for everybody… 60 percent to 65 percent it happens.”
If SiriusXM doesn’t go through with the acquisition, Verizon is looking to make a $100m investment into the streaming giant. While they show interest in Pandora, Verizon isn’t looking to acquire the 17 year old media company just yet. Verizon is still busy with integrating their recent acquisition, Yahoo, with AOL. Verizon is rumored to be interested in Pandora for their 80 million users, many of which are young.
The Orchard and Red Distribution Are Merging
The Orchard and RED are two of the three largest independent music distributors in the U.S., and they’re both owned by Sony Music Entertainment. Sony is deciding to merge the two into one global company operating under The Orchard brand. This move follows a similar acquisition Sony reached last year with Essential, a U.K. distributor, where they merged with The Orchard. They also acquired two additional indie distributors, Germany-based Finetunes and Norway’s Phonofile, and merged them into The Orchard.
The new and improved Orchard will continue to be run by CEO Brad Navin and will have over 300 employees in 30 offices around the world. It’s also set to pull in $500 million in revenue, which would make it the largest indie distributor of music in the world.
Apple Reveals New Smart Speaker
Apple unveiled a new wireless smart speaker for the home called Homepod at their annual Worldwide Developers Conference in San Jose on June 5th. The Siri-powered speaker retails for $350, and Apple will focus its marketing efforts on highlighting the privacy benefits of the Homepod compared to competitors such as Google Home and Amazon Echo.
“They’re really focused on privacy,” said one person with knowledge of Apple’s marketing plans. “There is no bloatware, no tracking, and they’re not selling your information. That’s completely different from Google Home and Amazon Echo.”
“Apple is also starting to differentiate their approach to reassure consumers about their privacy,” said Thomas Husson, a principal analyst at Forrester. “How their data is being used is a key area moving forward where both Google and Amazon are, for now, less legitimate given their core business models.”
Apple is a latecomer to the assistant-powered wireless speaker market. According to Forrester, Amazon has already sold 15 million Echo speaker units and is about to launch its next-generation device that will include a screen to display information. Both Amazon Echo and Google Home have made their software available to outside developers and brands to build new services for their users.
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