Fresh off its recent initial public offering, Montreal-based media company Stingray Digital Group is upping the ante in the mobile music sphere with a new iteration of its app that significantly boosts the number of music channels available to users.
Moving to position itself as a distinct player in the increasingly crowded field of subscription music streaming services such as Apple Music, Spotify and Tidal, Stingray plans to begin offering about 1,200 channels on its Stingray Music Mobile app by end of the month, chief executive officer Eric Boyko said in a telephone interview Monday.
That number is expected to rise to about 3,000 within the next 12 to 18 months, he said.
"We want to produce a lot more playlists," Mr. Boyko said.
The mobile roll-out is part of the company's strategy to continue adding value to its existing low-cost, continuous music streaming service on pay-TV in Canada and around the world, with an estimated 110 million household subscribers.
Unlike monthly services such as Apple Music, which allow listeners to pick and choose individual songs, Stingray's offering is relatively passive, with packages "curated" by in-house programmers. But Stingray offers increasingly sophisticated filtering devices that allow customers to select different moods, music genres, musical decades and even categories based on their mood, Mr. Boyko said.
"We're seeing very high engagement rates for our mobile apps. For the most part, people remain passive in their listening," said Mr. Boyko, who founded Stingray in 2007. The company sells its playlists to major cable-television, satellite and other providers such as Bell, Comcast and Dutch operator Ziggo. Subscribers get the service – originally known as Galaxie Music – as part of their cable package. The mobile app is based on the TV service and is available on Apple and Android-based mobile devices.
A separate Stingray unit sells customized background music to commercial customers, such as office buildings, hotels, restaurants and retailers.
"While the mobile offering doesn't generate additional fees, it enhances the service's value proposition, particularly among those seeking a portability option," National Bank financial analyst Adam Shine said in a research note Monday, which initiated coverage of Stingray.
Mr. Boyko said the company is currently in talks with telecom service providers in Canada, the U.S. and Latin America regarding potential deals for its mobile app and that announcements on that front are expected soon.
As for acquisitions, it's anticipated they will continue at a rate similar to that of 2014: about five per year, he said. "Our goal is to keep the same rate of acquisitions as last year."
Stingray has made 18 acquisitions since 2007 at a total cost of over $150-million, according to Mr. Shine.
Net proceeds of the Stingray IPO were $94.8-million including an over-allotment, he said; they were used to pay down the company's fiscal 2015 debt of $107.4-million, he added.
Mr. Boyko says he is sticking to his goal of reaching 400 million subscribers by 2020.
Stingray started trading on the Toronto Stock Exchange on June 3 at $6.25 per share. It spiked over $8 in the first 10 days of trading and now changes hands in the $7.25 range.
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