This is an interesting time to be in music streaming. Competition is rife, and the margins are thin. The largest players are either unicorns in search of profitability (i.e., Spotify, Pandora) or tech giants looking to lock consumers into their ecosystem (Apple, Google, Amazon). Smaller players are increasingly looking at ways to differentiate and stay afloat.

For example, Sprint recently announced that it is acquiring one-third of TIDAL, a rebranding of the Norwegian WiMP service that was acquired in early 2015 by American entrepreneur Shawn Carter ("Jay Z"). With just over 3 million subscribers worldwide, TIDAL competes with rival streaming services by offering its subscribers high-fidelity tracks and HD videos, as well as exclusive content and experiences. As part of this deal, Sprint subscribers who also subscribe to TIDAL will get access to as-of-yet unannounced extras. In return, TIDAL will get mindshare among Sprint's 43 million customers and a much-needed cash infusion.

A partnership makes sense. Worldwide, telcos have partnered with streaming music services using a number of different business models to better retain customers, compete with rivals, and generate additional revenue through upselling data plans. And as the North American mobile service market grows increasingly competitive, Sprint needs to leverage new and innovative strategies to continue adding subs and reducing churn.  But by purchasing a stake in TIDAL, Sprint is moving towards becoming a streaming service provider—a potentially risky venture in an already saturated market.

Want more information on music streaming partnerships?  Check out our industry report, Music App Partnerships: Global Insights.

Further Reading:

• 60% of smart watch owners subscribe to a paid streaming music service such as Apple Music, Spotify, or Pandora One
• Resurgence of Consumer Interest in High-Resolution Audio
• Crossing the Chasm – Understanding Growth in the Smart Home