Financial Times: ‘Spotify in Advanced Talks to Buy SoundCloud’

Matthew Garrahan, Madhumita Murgia, and James Fontanella-Khan, reporting for the FT:

Spotify, the music streaming service, is in advanced talks to acquire SoundCloud, as competition heats up with Apple for the future of digital music, said people briefed on the discussions.

SoundCloud, which raised $100m in June from a group of investors including Twitter, was last valued at about $700m. […]

A deal between Spotify and SoundCloud, two of Europe’s top tech start-ups, comes as Silicon Valley titans such as Apple and Amazon have recently launched their own music streaming services, forcing independent players to consolidate to survive.

On paper this seems like a good match. Spotify is the leader in streaming music, but their library is based on acts signed to major record labels. SoundCloud has a strong foothold with indie music acts (although they’re not paying them), but their own streaming service can’t compete with Spotify, Apple Music, et al on major record label content.

Wednesday, 28 September 2016