Breaking is a new column bringing you the biggest stories in business, along with my two cents--and a chance to share yours.
Spotify's about to close on a deal for $1 billion.
Yesterday, The Wall Street Journal reported that music-streaming site Spotify raised $1 billion in convertible debt, i.e., investors can change their securities into equity sometime in the future. (Exactly when isn't currently public.) The company's equity was valued last year at $8.4 billion.
The new deal would effectively double the amount of money raised by the streaming giant since being founded 10 years ago.
The streaming space is getting crowded: Apple Music, Tidal, and smaller competitors like Soundcloud are all vying for a piece of the pie. (Pandora just switched CEOs, hoping to avoid slipping into irrelevance.)
So the question is: What does Spotify have up its sleeve?
Re/Code senior editor Peter Kafka suggests three possible theories, namely:
- Spotify's loading up on cash in anticipation of its IPO
- The company's looking to buy a rival (maybe Pandora or SoundCloud)
- Spotify wants to expand into video
My two cents: Spotify's in for a fight. They've done a good job building a subscriber base, but they're still not profitable.
They might be on to something with expanding video. Just as desktop use has drastically shifted to mobile, we're currently witnessing a massive increase in video--everywhere from mobile news sites and digital marketing to social networking, across all platforms.
The problem is, the video market is just as crowded. A billion dollars is a lot of money, but is it enough to compete with Facebook, Netflix, and Amazon to get rights to stuff that no one else has? I don't think so.
Streaming music isn't going anywhere. Let's see if Spotify can figure out how to use their new cash to build a lead.
What do you think: What should Spotify do next?
Wine slushy, anyone?
You may have heard of "Starbucks Evenings," the coffee mega-giant's attempt at serving beer, wine, and appetizers in the evening once the demand for coffee all but disappears. But the company has a new drink that blends ice with wine instead of coffee. The drink is officially called a "Wine Fraggino."
There's only one catch: It was expected to be served in Japan and, according to a Starbucks spokesman, for only Wednesday night as part of a Starbucks Evenings promotion there.
Instead of coffee, the Fraggino features blueberry wine from the town of Yoichicho. It's blended with ice--just like a Frappuccino--and checks in at 900 yen, or about $8 U.S. Sadly, the company has not revealed possible plans to bring the beverage stateside.
My two cents: Would love to try one, but I won't be in Japan anytime soon. (Sigh.)
Still not sure how to feel about this one, though. Starbucks Evenings has met with mixed success, but it looks like Starbucks' CEO Howard Schultz is committed to making it work.
What do you think: Would you go to Starbucks for wine? Or is this another step in the wrong direction?
Another day, another Volkswagen lawsuit.
Latest on Dieselgate:
According to The New York Times, the Federal Trade Commission filed a lawsuit on Tuesday against the Volkswagen Group of America, claiming "the company's 'clean diesel' advertising campaign was deceptive."
VW's U.S. marketing campaign included a number of ads--as recently as last year--that tried to highlight the cleanliness of the company's diesel technology.
The F.T.C. is reportedly seeking some $15 billion in damages for consumers who bought or leased an affected vehicle between 2008 and 2015.
My two cents: Dang, Volkswagen. That commercial's as dirty as your cars.
What do you think: Is this case already closed?
Now, it's your turn. I look forward to hearing from you--and learning from your perspective. Don't forget to comment below or reach out via Twitter.
Correction: An earlier version of this column mischaracterized the wine-and-ice drink Fraggino as a Frappuccino and also the company's plans for it. The Frappuccino is made only with milk or a dairy-based alternative. It was a one-night-only promotion.