According to a report by the Financial Times, Spotify is now in advanced talks to acquire SoundCloud after rumours about a supposed buyout for SoundCloud have been swirling for some time now. Both Spotify and SoundCloud have declined to comment at this point in time per Variety.
This news comes following another rumour that Spotify was looking for a new buyer at $1 billion valuation which makes Spotify’s involvement all the more interesting.
As the global leader in paid streaming, Spotify has quickly become a household name in the music/tech industry and beyond with its cheap service, ease of use, and its huge library. SoundCloud on the other hand, has always been more of a forum for emerging producers and musicians to upload tracks without the need of a paid distributor as is the case with Spotify.
Variety points out that the partnership between SoundCloud and Spotify would not only help increase Spotify’s current catalogue, but would also make it easier for bedroom producers and small artists to use the platform which would compensate them per stream via royalty. As it stands, SoundCloud’s monetization for rightsholders is currently lacking when compared to Spotify, Apple Music, and most other players in the music streaming world.
One of the major gripes with SoundCloud right now is the ability for major labels to restrict tracks to previews for non-paid free users. Premium SoundCloud users, subscribers to SoundCloud Go, don’t face any restrictions of the sort. Contrast that to the difference between premium and free Spotify accounts where the only major difference is ads for free users in between songs.
At this point in time we await further developments on the story.