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Spotify reportedly in late-stage talks to acquire SoundCloud

By Shawn Knight
Sep 28, 2016
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  1. Spotify’s stranglehold on the music industry may soon become a bit tighter as the streaming titan is reportedly in advanced talks to acquire SoundCloud.

    Sources familiar with the matter tell the Financial Times that Spotify management was worried that SoundCloud would be a threat if rumors of a cheaper, mid-tier subscription plan came to fruition. When SoundCloud abandoned those plans and launched an industry-standard $9.99 per month option earlier this year, however, Spotify no longer felt they were a threat due to their relatively small catalog of non-independent tracks.

    Earlier this month, Spotify said it now has more than 40 million paid subscribers, up from just 30 million back in March. By comparison, Apple only has 17 million subscribers to its streaming music service and Tidal reported three million subscribers this past March.

    Spotify already offers music from all of the major record labels so it wouldn’t gain anything on that front. Instead, an acquisition would deliver to Spotify a wealth of user-created tracks consisting of remixes, songs from independent artists, DJ sets, demos and more. A buyout would also reduce the number of competitors in the online streaming space, no doubt good news for both Spotify and other streaming providers (assuming of course that SoundCloud is rolled into Spotify (they may elect to continue to operate it as a standalone entity)).

    If the deal goes through, SoundCloud wouldn’t come cheap. The company, which raised $100 million from investors in June, was last valued at around $700 million according to the Financial Times.

    Image courtesy Bloomberg

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