Reportedly, Spotify is in advanced talks to buy music streaming service SoundCloud. The service is very appreciated because it helps new bands and artists become famous by promoting their music. Now, there are reports which say that Spotify wants to buy SoundCloud. This is not the first time this happens. Two years ago, Twitter wanted to acquire it. Eventually, they decided it was better to just invest in the music service. They ended up investing almost $70 million. This way, SoundCloud’s valuation ended up being of $700 million. That is a lot.
Close the deal
But it seems like Spotify really want to seal the deal. And it may be worth $1 billion as some sources are whispering. SoundCloud has a solid fan base made out of both musicians and fans. But financially wise, the service has been struggling a little. They also launched SoundCloud Go in March, wanting to compete with other giants like Apple Music and Spotify. This premium costs $9.99 a month and it offers online playback, no adds and access to a bigger music library. But as recent statistics show, this service has been struggling to take off. So if Spotify could incorporate this premium, it could prove very useful in further developing something bigger.
Spotify also struggled a bit. They wanted to become more profitable and the service had to win some battles in this regard. But now, it represents the top service in the music streaming industry. It now has around 40 million subscribers and more than 100 million monthly active users. In contrast, Apple Music has only 17 million paying subscribers. No doubt, Spotify is the top choice for this kind of material.
But it looks like nobody can relax in this industry. More competition is bound to arise, and the music streaming market is about to get more and more competitive. Even crowded. Amazon, iHeartMedia or Pandora are some companies (among others) which are expected to get their head in the music game soon. They might even change it. So the pressure that will be put on the existing services will be huge. Having this in mind, it looks like Spotify’s move to buy SoundCloud seems like a very good idea. The context is good for such an acquisition now. It might make both services more profitable and gather a larger audience. If Spotify were to buy SoundCloud, this could enable them to get music straight from the artists and not face those music label problems.
Bottom line is that, by buying SoundCloud, Spotify will gain access to its 125 million songs. Other than that, it would get rid of a tough competitor by forming an alliance with it. It really sounds like a good plan. And if they move quickly, they might even get ahead of the other rivals who are just developing. And an alliance means that the service will have more songs than all the rest. When the time comes, they will be the only serious music streaming service. And the oldest and most experienced in the business. Sounds trustworthy, right?
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