Scandinavian news publisher Schibsted is set to buy Aspiro, a white label digital music streaming service for 340 million Swedish krona ($49 million, £32 million), to compete with Spotify on the global stage.
Oslo, Norway-based Aspiro’s board is recommending shareholders accept Schibsted’s offer to buy all shares; a third of shareholders have expressed support. Schibsted already owns 18.3 percent of the company.
Schibsted CFO Trond Berger: “Aspiro … has succeeded in getting users to pay for digital content, which fits well into Schibsted’s current work on how to monetize its digital media content.
“… we are convinced that Schibsted will be able to accelerate Aspiro’s development through our combined experience from online businesses and by utilizing Schibsted’s existing online distribution channels across Europe.
“We belive that the company is better positioned to grow as part of a larger group. In the future, we may also seek strategic partners to further utilize the potential in WiMP music streaming services.”
Aspiro operates the WiMP unlimited music service to telcos Telenor and Canal and PT in Denmark and Norway, via the Norwegian entertainment retailer Platekompaniet, plus on a white label basis through PT in Portugal and via another partner coming up in the Benelux. Cost is 99 Norwegian kroner ($16, $10) per month. The company tells paidContent it will also launch in Ireland and Germany. As of September, WiMP had some 350,000 paying users.
Music subscription services are currently gathering pace as labels seek an alternative to dependency on iTunes’ per-track download model. The larger ones are racing to lock up partner contracts in countries on the global stage. WiMP is a relatively unknown brand compared with the likes of Spotify, Rdio, Mog, We7, Sony (NYSE: SNE) Music Unlimited etc.
Aspiro’s offer explains: “The music streaming market is a competitive international industry, and Aspiro has limited financial resources to attain the scale required to make this a profitable business. In Schibsted’s view, the strategic shift towards streaming solutions will require further investments in order to reach a potential positive cash flow.
“Although Schibsted’s core areas are online newspapers and classifieds, it has developed a number of other successful internet companies within a range of different areas. Schibsted strongly believes that it boasts a unique internet competence and that this can be of great benefit for the future development of Aspiro
“Schibsted’s dominant position on the internet in Norway and Sweden and strong internet presence in many other European markets, can be of great value for Aspiro in future expansion of its music streaming business.”
Background
Aspiro made 185 million Swedish krona ($26.6 million) in net sales in 2010, according to Schibsted. That was 159 million krona ($22.9 million) from January to September 2011.
It has divested its unsuccessful mobile entertainment assets over the last two years.
Schibsted publishes the largest newspaper in Scandinavia (Sweden’s Aftonbladet), in Norway (VG and Aftenposten), plus the Svenska Dagbladet and owns the metronome TV production company, amongst others, including jointly publishing France’s free daily 20 Minutes paper.
Aftobladet itself has found success charging for online content. It started its Plus freemium service some eight years ago and had 115,000 customers as of October. A separate paid weight loss club started in 2003 had 385,000 subscribers.
But Schibsted is also buying big in to online classifieds. Whilst rolling its Blocket.se classifieds brand out to 14 European countries, Schibsted bought out France’s Leboncoin.fr, said to be Europe’s third largest classifieds site, to €140 million.
Schibsted’s CFO already chairs Aspiro’s board.