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Music streaming gets messy

In the past month, three of the largest music streaming companies all declared major business changes:

  • Pandora, which has 81 million users, is reportedly in talks with SiriusXM about a potential acquisition. Pandora said last Monday it has raised money to potentially explore a sale next month.
  • Spotify, which has 100 million users, is reportedly planning a direct listing on the NYSE as early as this fall.
  • IHeartRadio, which has over 100 million registered users for its streaming service, announced last month it expects bankruptcy this year.

What it means: The business changes at each organization may not be related, but they point to a growing trend of competitiveness driving instability in the music streaming market.

  • Earlier this year, Jay-Z sold 1/3 of his streaming service, Tidal, to Sprint after facing major losses in 2015.
  • Meanwhile, Pandora and iHeartRadio both launched subscription services to compete with the likes of Spotify and Apple Music, who are leading the market in subscribers.
  • And like we're seeing with the cable industry, all the players are facing messy disputes over licensing fees with the content creators.
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