By: Nick Gambino
Everyone’s favorite music streaming platform (Spotify) might be buying everyone’s…well… another music streaming platform (SoundCloud).
As reported by the Financial Times citing sources familiar with the discussions, this acquisition could be a huge step forward for Spotify placing it ahead of its competitors like Apple Music. Spotify has yet to confirm this rumor.
SoundCloud launched its own paid subscription service, SoundCloud Go (not really an original name, is it?), several months ago but has failed to see that become a popular alternative to the bigger guys.
Apparently they’ve been looking for a buyer for some time now but have had trouble nabbing anyone willing to pay out their self-assigned $1 billion valuation.
They did manage to raise some capital in June from a bunch of investors including social media giant, Twitter. They raised $100 million and were last valued at a “modest” $700 million.
Though Spotify has about 40 million paying subscribers they’ve still yet to become profitable. Acquiring SoundCloud could be the boost they need to really turn the financial tides. SoundCloud has a decidedly different user base, with the opportunity for more independent artists (or really anyone) to upload their content.
By combining, their paying subscriber base could take a significant hike securing Spotify the gold in the Olympic streaming music race.
These are deciding times for digital music as the whole music industry itself is at a tipping point with record labels suffering and full album sales dwindling.
Spotify, Amazon, Apple Music, Tidal and Pandora (who just announced their own intent to create an on-demand streaming platform) have seized their opportunity much the way major record labels did in the 1950s.
We’re witnessing history here and the formation of a model that will play out easily for the next 50 years until someone else comes along and says, “Hey, here’s another way to listen to music.”
Let’s just hope they don’t start trying to plant music chips in our heads that connect straight to our ear drums.
What are your thoughts on Spotify potentially acquiring SoundCloud? Good idea or bad?