Spotify is in talks to scoop up SoundCloud

   

The future of digital music is up for grabs with Apple making big strides towards consolidating the streaming space for itself, but not if Spotifyhas something to say about it.

Rumors have it that the Swedish music streaming service is in talks to acquire SoundCloud. By teaming up, they will look to throw a punch towards Silicon Valley behemoths like Apple, Google and Amazon who also has their own music streaming platforms.


In June, SoundCloud raised $100m from a group of investors and was last valued at $700m. But according to the Financial Times, it is unclear how much Spotify is willing to pay for SoundCloud, as there are chances the discussions between the two may not bear fruit.

SoundCloud hasn't been doing well of late. It still hasn't broken even despite having a 200 million strong community with over 135 million tracks, mostly remixes and independent music artists.

In 2014, the German startup reported a turnover of $17.4m but an operating loss of $39m. Since then, SoundCloud has not reported user numbers or about their business health.

Spotify considered SoundClound a threat till it was offering a similar mid-tier subscription service, only cheaper. But then SoundCloud decided to up its game and issue a standard $9.99 subscription known asSoundCloud Go, it lost its chance to be competitive.

And it is not the first time Spotify tried to scoop up SoundCloud. The Swedish company had fairly detailed talks with the German startup about a potential acquisition, but got blocked by the asking price.

Now that Spotify is gearing up for an IPO, it is looking to diversify its content through video and podcasts and by boosting its paid subscriber base.

And this can be done if both of them joins forces. SoundCloud has a community of creators with covetous catalogs of the best EDM and Hip Hop artists while Spotify comes with a huge user base.

And with music revenues going up for the first time in decades, boosted 45.2 per cent through streaming revenues, it's great news for independent artists too!

Considering how difficult it is for a standalone company to square up with the likes of Amazon and Apple, teaming up with SoundCloud can helpSpotify remain in the lead.