Facebook, Twitter and Google are the new ‘major record labels’

Back in the old days, the big record labels were ruling the music business. BMG, CBS/Columbia, EMI, Polygram and Warner have since consolidated into new companies like Sony Music, but most people don’t know who is owning who anymore after a series of buyouts and mergers. Actually, besides the indie scene, music fans probably have no idea which record label released the music they are listening to anymore. Do you know which record label Pharrell Williams is signed to? I thought so.

What people do know, however, is which streaming service they prefer. And they have a lot to choose from. Spotify, Rdio, Beats Music, Deezer, Slacker, SoundCloud, GooglePlay, iTunes Radio, YouTube, Vevo, XBox Music, Rhapsody and Music Unlimited are some of the big international players who are joined by various local streaming services around the world. If you go behind the scenes and view the streaming services with a social media and tech perspective, there is bound to be consolidation here as well.

The big five in music is now represented by the big five in tech: Amazon, Apple, Facebook, Google and Microsoft. Add to that one player that – quite uniquely – is represented in both: Sony.

Amazon and Apple are expected to launch their own streaming services soon. Microsoft has the XBox service and Sony has the Music Unlimited service. Google is playing on two horses with GooglePlay and YouTube. Which leaves Facebook and that other mega social network fresh with massive IPO cash at hand, Twitter.

Facebook already has a close partnership with Spotify and I am pretty sure that Daniel Elk and his investors (the record companies) are scratching their heads every day: should they go for an IPO as a stand alone company or should they sell to Facebook. Either way, they will end up will billions of dollars. The questions is whether their company will be more successful under the ownership of Facebook as part of the family with Instagram and WhatsApp and their combined monster assets of users or if they are better off as a company that can partner more freely.

Twitter has also dipped its toes in music with their Twitter Music initiative, that is currently collaborating with iTunes, Spotify and Rdio.

My prediction is this: Facebook will buy Spotify in the biggest tech deal the world has ever seen in a complex arrangement at a price tag up to a staggering 25 billion dollars (including upfront and future payments). Twitter will buy Rdio for a much smaller number. Google will react with a more focused music strategy and all three will have so much social media power that they will control the music market in the future.

Amazon, Apple, Microsoft and Sony will struggle because they missed the social boat. Unless they begin doing something serious about it now. Microsoft could finally buy Yahoo! and tap into Tumblr. Sony could buy Pinterest as a social platform. But what Sony should really do is spearhead an Asian powerhouse based on the LINE social app.

Samsung should do the same with KakaoTalk.

The big question is what the Chinese biggies QQ, Weibo and not least WeChat will do.

In the next phase the battle for music will probably be on WhatsApp, KakaoTalk, LINE and WeChat.

I wrote this article while listening to this song: