Spotify set to buy SoundCloud?

Spotify set to buy SoundCloud?

Spotify has refused to comment on a Financial Times report that it is about to acquire SoundCloud in a bid to bolster its position at the top of the streaming market.

Though reports of the sale are so far unconfirmed, the deal would certainly reinforce Spotify’s dominance on the streaming market.

Berlin-based SoundCloud claims to have 175 million active users who can access 125 million tracks, more than Spotify's 30 million-plus, due to the presence on the site of millions of uploaded remixes. Spotify has 100 million users worldwide, 40 million of which are paying subscribers.

However, both services are yet to turn a profit. Spotify lost $194 million in 2015 with sales of $2.2 billion, while SoundCloud is understood to have been losing €23m in 2013 and €39m in 2014 (with revenues of €17m). 

In July, rumours began circulating that SoundCloud founders and investors were considering selling the company, which it values at around $1bn. Although sources claim that it was struggling to find a buyer at that price.

In June, the company raised funds of $70m from Twitter as part of a $100m funding round, which valued the firm at around $700m Bloomberg sources said.

The platform, which currently has around 175 million users, launched a premium service earlier this year, which offers an ad-free streaming service and wider access to songs for $10 (US) / £9.99 (UK) per month.

This month saw Spotify take its total number of global paying subscribers to 40 million, just one week after its rival Apple Music reported that its paying user base had now hit 17 million subscribers.

Spotify declined to comment. SoundCloud could not be reached.

Music Week Radar, 26th May 2016

JP Cooper – Tidal Wave. Filmed at Music Week Radar, Under the Bridge.

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