When Spotify came to the table, it revolutionized the way we listened to music. Streaming music has become the most popular source for discovering and listening to music. Now the music streaming giant Spotify is in talks to purchase one of its competitors SoundCloud. As of recently, SoundCloud was valued at $700 million although it is uncertain how much Spotify will pay or if they will go forth with the deal at all.
You may be wondering what is Spotify‘s interest in purchasing SoundCloud seeing as they have never turned a profit. When SoundCloud started their paid subscription service, they could have been more of a threat if they had opted for a cheaper price than Spotify’s or Apple’s. Instead SoundCloud went for the standard $9.99 per month which to Spotify killed the independent threat. Last year, the two companies had talks about purchasing SoundCloud, but after the asking price was too high Spotify backed off.
It is easy to see the interest that Spotify has in SoundCloud which is the way they obtain their music. Spotify is limited to official releases from labels just like Apple Music. SoundCloud has access to a huge library of remixes, bootlegs, and tracks from independent artists. The hope for these companies is to have access to music that the other doesn’t have. Imagine a streaming service that combines access to music from music labels and independent artists.