Jay Z Is Spending $56 Million To Compete With Spotify... And Dr. Dre

The hip-hop mogul's most ambitious business move is a big-ticket bid on a hi-fi streaming service.

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Dr. Dre became the richest man in music last year in part by successfully building a digital streaming platform, Beats Music, and now Jay Z wants a piece of the action. The hip-hop superstar made waves in the music industry this morning with the announcement of his $56 million bid (464 million Swedish Krona) for Aspiro AB, the Swedish parent company of two streaming services, WiMP and TIDAL.

Pending shareholder and regulatory approval, Project Panther Bidco, a subsidiary of Jay Z's S. Carter Enterprises, will acquire all shares of Aspiro in an all-cash deal. Aspiro's board has recommended that shareholders accept the offer.

WiMP and TIDAL are marketed differently, but are essentially the same service. TIDAL, which launched last fall, is the U.S. version of WiMP, a four-year-old Spotify competitor that's only available in Scandinavia. Much like Spotify, TIDAL offers a large catalog of music — 25 million songs — for on-demand streaming.

But unlike Spotify, and most popular streaming services in the U.S., TIDAL uses a high-fidelity 16-bit streaming protocol, making it a leader in the growing trend of premium audio. It also doesn't offer a free tier. A subscription to TIDAL costs $19.99 a month, twice the cost of the most expensive version of Spotify.

Apple's $3 billion purchase of Beats Electronics last year included slightly less than $500 million for its Beats Music subsidiary, with many predicting that the streaming service will play a critical role in revitalizing Apple's own iTunes. The deal earned Dre, a co-owner of Beats Electronics with Jimmy Iovine, a reported $620 million — the most money a musician has ever earned in a single year.

Jay Z, who is a longtime friend and collaborator of Dre's, most notably on his 2006 comeback album Kingdom Come, has his own history of big ticket business moves. In addition to his clothing company, Rocawear, and full-service music company Roc Nation, he famously bought (and later sold) a share in the New Jersey Nets, helping to move the professional basketball team to Brooklyn in 2012. In 2013, he launched the sports agency Roc Nation Sports in partnership with the Creative Artists Agency.