BERLIN (CelebrityAccess) — Music streaming service Spotify is said to be in advanced talks to acquire rival service SoundCloud.
According to the Financial Times, sources briefed about the talks were unable to offer insight into how much the deal might be worth and noted that negotiations for the Berlin-based music company had not been finalized.
SoundCloud, which launched in 2007, says it has more than 200 million users and a library of 135 million tracks but has yet to turn a profit. In 2014, the last year the company reported any financial data, it reported a turnover of €17.4m and an operating loss of €39m.
People close to Spotify management told the Financial Times that Spotify viewed SoundCloud as a threat as the company offered a less expensive mid-tier subscription. However, SoundCloud abandoned that price tier earlier this year, under pressure from labels to adopt the more standard $9.99 option known as SoundCloud Go.
“They’ve been absolutely dobbed by all the pressure from the labels to go in for a cookie-cutter subscription service which doesn’t fit their user base, content or catalogue. It’s an artifact ultimately,” analyst Mark Mulligan, founder of Midea Research told the Financial Times.
The acquisition of SoundCloud would be a boost for Spotify as it grapples with streaming rival Apple. Spotify currently has more than double Apple's subscriber count, reportedly passing the 40 million mark ahead of Apple's reported 17 million. – Staff Writers