Alphabet Inc (NASDAQ:GOOGL) Google’s YouTube reportedly acquired a San Francisco firm called BandPage in a deal valued at $8 million. The highlight of the acquisition is how it will influence the music streaming industry.
Music streaming services such as Spotify have been facing some hard times as losses pile up. In the past two years, SoundCloud lost $70 million while Pandora Media Inc (NYSE:P) lost $19.4 million in revenues in the fourth quarter of 2015. YouTube itself has also been a victim of the low revenue situation. However, its new acquisition promises some hope for the industry.
BandPage helps musicians and bands to connect with fans. It also sells concert tickets on the internet. The firm announced the deal on its official blog where the officials expressed their excitement to be part of YouTube. They also added that the direction will help streamline their goal and quicken them towards boosting the success of musicians.
BandPage is a powerful tool because it simplifies marketing for artists by incorporating automatic updates to multiple platforms including YouTube, SoundCloud, Spotify and social networks of Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR). A few other streaming services are also involved. The marketing firm has proven that it can help boost revenues and fan base in the past. The company made the rate of face Facebook ads go up by ten times and also increased the number of fans on Rhapsody by 50%.
YouTube hopes that the acquisition will help boost the productivity of the platform for artists as well as making the streaming platform more valuable to the music Industry. Its close involvement with the other players in the industry is also expected to help them turn those losses into profits. Data from the Recording Industry Association of America (RIAA) and Nielsen indicates that on-demand music generates only 13.5% of YouTube’s revenues despite the fact that the platform serves 52% of the music streaming consumption. Hopefully, the acquisition will transform YouTube into a better distribution platform for artists.