Google Offered $15 Million to Buy Songza (Report)
Google has offered $15 million to acquire curated playlist site Songza, according to the The Future of Streaming: Apple’s Entry May Usher in an Era of Titanic Competition
Unlike Beats or its competitors such as Spotify and Rdio, however, Songza doesn’t provide an on-demand streaming service that allows users to pick specific songs. It began as Songza Sets, a discovery-oriented product offered by downloadable music store Amie Street, whose founding team eventually sold the store to Amazon in 2010 and focused on Songza instead.
More from Billboard
Here's What Scooter Braun Had to Say to New Band &TEAM, Produced by HYBE LABELS JAPAN
Scooter Braun's Ithaca Holdings Targeted for Acquisition by Former TikTok CEO
The company draws revenue from advertising, and limits the number of times a user can skip a song, thereby paying non-interactive webcasting royalties similar to those paid by Pandora and other Internet radio companies. If Google were to acquire Songza, the royalty rates on songs in its playlists would increase, because of the loss of “pure-play” rate privileges extended to companies that specialize in streaming. Songza, which targets both web and mobile users, also introduced 99-cent-per-week ad-free subscriptions last year.
Songza has about 5.5 million active users, a small fraction of Pandora’s 75 million-plus listeners and significantly less than Spotify’s 10 million paying customers, among its 40 million free and paid users.
Business Matters: What’s Behind YouTube Music Service’s Delays
Google’s Play Music service already offers a smart-playlisting function around a song or artist, but doesn’t include human-curated playlists. As a specialist in this area, Songza is one of several companies thought to be ripe for consolidation, as large tech companies have stepped up their dealmaking in the online music arena lately.
Along with Apple’s Beats buy, other giants are thought to be readying new streaming initiatives; Amazon is reportedly preparing to add music to its Prime service within a few weeks, while Google is believed to be launching a YouTube-branded music service later this year. Google hasn’t released any numbers, but it’s widely believed that uptake of its existing subscription service has been slow.
At the investor level, Songza has connections to two of those three. Beyond Amazon’s cash commitment and prior association with Amie Street, Google VP of U.S. retail sales John McAteer has also invested in Songza, as part of a 2012 convertible note worth $1.5 million.
Songza Raises $4.7 Million in Funds for Advertising
Songza raised another $4.7 million in a round announced last September, from investors including artist managers Scooter Braun and Troy Carter, as well as Lerer Ventures, Deep Fork Capital, Metamorphic Ventures, William Morris Endeavor, and author Gary Vaynerchuk. Prior investors also include 1-800 Flowers, NBA star Baron Davis, artist manager Julius Erving Jr., and 24/7 Real Media co-founder Geoff Judge.
The original Songza was a search engine that located and streamed music files found on the web. That product was designed by user interface expert, Mozilla designer and serial entrepreneur Aza Raskin, from whose name Songza took its moniker. Amie Street acquired it in 2008.
Best of Billboard
