SHARE
COPY LINK

SPOTIFY

Jay-Z says he overpaid for Nordic Spotify rival

Hip-hop superstar Jay-Z believes he overpaid for Scandinavian streaming service Wimp and is preparing a multi-million dollar lawsuit.

Jay-Z says he overpaid for Nordic Spotify rival
US rapper Jay-Z. Photo: Mark VonHolden/Invision for HTC/AP

Several Swedish and Norwegian companies have received letters from the parent company of the streaming service Tidal warning that the US rapper will go to court to get compensated for having paid too much money when he bought Wimp in March 2015 for approximately 466 million Swedish kronor ($54 million).

The hip-hop mogul's claim could run up into the “hundreds of millions” of kronor, Norwegian business outlet Dagens Næringsliv reported.

The primary claims in the letter sent to Wimp's previous owners, including its primary shareholder, the Oslo-based media group Schibsted – which also owns Sweden's biggest newspaper Aftonbladet – are that Wimp had far fewer subscribers than what was declared prior to the sale and that the company was in a significantly worse economic situation than Jay-Z was led to believe.

Wimp reported that it had 512,000 paying users in Scandinavia, Germany and Poland as of the third quarter of 2014.

Schibsted's communications director Anders Rikter said the compnay was caught off guard by the potential lawsuit.

“We find ourselves very puzzled by the letter and its claims,” he told Dagens Næringsliv.

Rikter said that the deal was carried out with full transparency in compliance with the rules for publicly-listed companies.

After its purchase, Wimp was re-branded Tidal and was marketed by Jay-Z and other big-name music stars as a lossless, high-quality audio alternative to other popular streaming services.

Earlier this week, Tidal announced that it had three million paying customers, a far cry from the 30 million who subscribe to Sweden’s Spotify or the 11 million who use Apple Music. 

In addition to Jay-Z, artists including his wife Beyonce, Madonna, Jack White are Kanye West are heavily involved in Tidal as “artist-owners”, with the latter releasing his latest album ‘The Life of Pablo’ exclusively on the service. 

SPORT

Is football next for Spotify’s billionaire CEO? 

The owner of Spotify, Daniel Ek, has offered to buy Premier League club Arsenal amid supporter backlash against their unpopular American owner, Stan Kroenke.

Arsenal play to an empty stadium
Spotify's owner has set his sights on Arsenal. Photo: Adrian Dennis/AFP

Spotify’s billionaire CEO, Daniel Ek, who revolutionised on-demand music listening for millions of people now hopes to bring his business acumen to “the beautiful game”.

The 38-year-old, known for his no-nonsense attitude, has offered to buy Premier League club Arsenal amid supporter backlash against unpopular American owner Stan Kroenke.

Ek co-founded Spotify with Martin Lorentzon in 2006, and the company which made its debut on the New York Stock Exchange in 2018 now has a market capitalisation of $56 billion.

The Swedish billionaire 

Bald, bearded and usually seen in sneakers, T-shirt and a blazer, Ek is known for his reserved style and pragmatism. He’s a shy problem-solver with a creative streak who takes long walks to think things through and prizes collective teamwork over the individual.

Ek got into computer programming as a young child, and was a dollar millionaire by the age of 23 when he sold his online advertising company, Advertigo, in 2006 for a reported $1.25 million.

“But he’s more of a businessman than a tech nerd,” Sven Carlsson, co-author of “The Spotify Play”, told AFP, painting him as a visionary.

“He’s always thinking six months ahead. He’s not into the details. He’s known for having ambitious, lofty goals, with no understanding for how unrealistic they are,” he said.

“He thinks big, and he has patience” to see those projects through to fruition.

Ek was raised in Stockholm’s working-class suburb of Rågsved. His father left the family when Daniel was young.

“He’s always had something to prove… Being left by his dad was a formative experience,” Carlsson said.

Pelle Snickars, co-author of “The Swedish Unicorn: the Story About Spotify”, describes Ek as “quite Swedish in terms of values”.

“We don’t see him on magazine covers alongside celebrities, he’s not hierarchical and does not hesitate to showcase his collaborators,” Snickars told AFP.

With around 9 percent of Spotify’s capital and 37 percent of voting rights, Forbes put Ek’s fortune at an estimated $4.8 billion in April 2021.

“Innovations are never entirely new”

In 2006, Ek and Lorentzon came up with the idea of creating a platform to distribute music online legally, a practice that was dominated by illegal file sharing sites at the time.

The duo experimented with sharing MP3 music files between the hard drives on their computers. In October 2008 Spotify was finally ready to go live after Ek pleaded with music labels to open their catalogues.

“Innovations are never entirely new,” Ek told the Royal Institute of Technology (KTH) in Stockholm during a 2013 visit.

“The success comes from combining things that already exist and trying to solve a problem that one is really involved in,” he added.

Ek reportedly dropped out of the university’s engineering programme to pursue an IT career – though his enrolment at the school has never been proven, Carlsson noted.

He said Ek’s former colleagues nicknamed him “Spice.”

“They thought he always spiced up his stories a little to make them more interesting,” Carlsson said, adding that it wasn’t necessarily a bad thing.

“Storytelling is something Spotify and Daniel Ek have always been good at.”

Football next? 

Ek’s perseverance may have led to the remarkable rise of the start-up, but artists have over the years complained of it paying them too little and cannibalising sales from their albums.

Ek has repeatedly argued that streaming is a better alternative for artists and that “piracy doesn’t pay (them) a penny – nothing, zilch, zero.”

Snickars and co-author Rasmus Fleischer dispute the idea that Spotify was founded to end piracy and force consumers to pay for music.

They claim that neither Ek nor Lorentzon “had any experience with working professionally with music”, but they had a common background from digital advertising.

“They weren’t particularly interested in music…they could have worked on skin products instead,” Snickars told AFP.

Now, Ek is ready to dive into the football arena.

“As a kid growing up, I’ve cheered for Arsenal as long as I can remember. If KSE [Kroenke Sports Enterprises] would like to sell Arsenal I’d be happy to throw my hat in the ring,” Ek wrote on Twitter on April 23.

Kroenke has however insisted Arsenal is not for sale, despite growing supporter unrest at the American billionaire’s ownership of the club, whose last Premier League title came in 2003/04.

Article by AFP’s Pia Ohlin.

SHOW COMMENTS