In a sign of growing consolidation in the digital music business, Google announced today that it had bought Songza, a three-year-old app that competes with Pandora and others in making customized playlists of recommended songs.
The price was not announced. But a person briefed on the deal, who was not authorized to speak about its terms, said that Google paid more than $39 million for Songza. Representatives of Google and Songza declined to comment on that figure.
Acquiring Songza could help Google improve its ability to offer musical “curation” — the buzzword of the moment in digital music, meaning the ability to generate playlists of songs that are tailored to each user. In the case of Songza, its specialty is a concierge service that matches playlists to particular times of day, or to activities, like working, studying or entertaining at home. A deal with the Weather Channel allows Songza to further tailor its music recommendations to a listener’s current weather conditions.
“We can’t think of a more inspiring company to join in our quest to provide the perfect soundtrack for everything you do,” Songza said in a statement on its website on Tuesday afternoon.
The Songza deal is much smaller than Apple’s recent $3 billion deal for Beats, which along with its line of popular headphones operates a fledgling subscription service whose chief selling point is playlists curated by music experts. Most of that purchase price was attributable to Beats’ lucrative headphones business.
Google said in an announcement that it was not “planning any immediate changes to Songza,” but may begin to incorporate the service into the company’s existing services, like Google Play Music or even YouTube. Google Play Music includes an iTunes-like download store as well as a subscription streaming service, All Access, that competes with Spotify. Barely a year after being introduced, All Access is already available in 28 countries, but music executives complain that its appeal has been limited.
Songza, which offers its playlists free along with advertising, could give Google a ready-made free music service along with expertise in creating playlists.
Introduced in fall 2011, Songza emerged from the ashes of a music download service called Amie Street. Songza grew quickly, reporting 5.5 million regular users at the end of last year. Pandora, which has dominated the market for free streaming music, has more than 75 million regular users. Counting investments made in Amie Street, Songza has raised a total of $12 million from investors including Amazon, the William Morris Endeavor talent agency and the music managers Troy Carter and Scooter Braun.
Apple’s purchase of Beats has brought speculation of many further deals among streaming music services, many of which are run by small startups with limited budgets. Spotify, one of the sector’s leaders, has 10 million paying subscribers around the world and may be considering an initial public offering of stock.
Last week, Lew Dickey, the chief executive of Cumulus Media, a chain of more than 400 radio stations that owns a 15 percent stake in the streaming service Rdio, predicted in an interview with The Associated Press that “there will be handful of survivors” among such streaming companies.