MTV’s Circuit Board Sold For $6 Million
When Circuit Board Corp. sold its $6 million stake in the company to the music streaming service Tidal for $1 billion, it sent shockwaves through the industry.
The deal was hailed by many as a “watershed” for music streaming and for the music business.
The company, which was spun off from CBS in 2011, has a history of selling its holdings to big music companies for massive sums of money.
Tidal has sold a controlling stake to a major record label for $7.5 billion, and it has sold off a controlling interest in Warner Music Group to Universal Music Group for $2 billion.
But in a sign that the music industry is now realizing that the current model for record labels and streaming services is not sustainable, Circuit Board CEO Mike Schoenfeld said he was confident in Tidal’s ability to thrive in the music market.
Tidal CEO Mike Schmidt speaks at a Tidal event in New York City in 2015.
Schmidt told reporters on Monday that the deal would allow Tidal to “continue to grow in terms of revenue, in terms the amount of music being streamed.”
“We have a great future,” he said.
“We’re in a place where we can grow this business and grow this revenue stream and really have a long-term view in the long run.”
Schmidt also said the new company would be able to continue expanding its catalog of original music.
The new deal, which could take place over the next few years, will give Tidal the same rights to exclusive digital content as the record labels, but with a much smaller amount of content.
TIDAL has a licensing agreement with Spotify that is worth $500 million a year.
Schoenfeld also said that Tidal would have the ability to acquire streaming music services such as Pandora, SoundCloud, and Apple Music, all of which are valued at more than $4 billion each.
Schulings statements come as Tidal and the major record labels are wrestling with their financials and their plans for the future.
Tearful negotiations between Tidal, which is owned by Apple, and record labels have been ongoing since the summer of 2017, when the streaming service signed a licensing deal with Warner Music.
The terms of that deal were not disclosed.
Tad Williams, a TIDELAY veteran who is now a managing director at music industry consulting firm Dealogic, said that the $1.1 billion sale would have been a “game changer” for Tidal.
“We’re going to be able take this investment and move forward in a very different direction,” he told The Wall Street Journal.
Scholars have predicted that TIDLA will become the dominant player in the streaming music market by the end of the year, given the company’s growing popularity in the US and in other markets.
In addition to streaming services, TIDYL has become a major music publisher, releasing albums by artists such as Rihanna, Drake, Beyoncé, and Chance the Rapper.
But the record companies say the company has been struggling to build its catalog.
The company has struggled to monetize its music, especially on streaming services.
Schönfeld said the deal will allow TIDLE to continue to grow its catalog and expand the services that it offers.
“With this investment, we’re going forward with the most innovative catalog ever in the industry,” he added.
The record labels’ strategy has been to take their catalogs and distribute them on streaming music service, Tidal or Apple Music.
But Spotify has emerged as the leading streaming service in the world.