Things are heating up on the streaming wars battlefield this week, as The Financial Times (via Variety) reports that Spotify is currently in talks to acquire SoundCloud. According to the publication, a formal announcement could be imminent.
This news comes just two weeks after Spotify announced that it had surpassed 40 million subscribers — boasting a growth rate two times that of rival Apple Music. As for SoundCloud, although it recently launched its own paid subscription service, an acquisition shouldn’t come as much of a surprise as the platform’s profits have dipped steadily.
In fact, a report in February revealed that SoundCloud, which was founded in 2007 and in Stockholm like Spotify, had been hemorrhaging money for some time, losing upwards of $70 million over the last two years. At the time, the company’s directors concluded that “there are material uncertainties facing the business.”
If Spotify were to successfully take SoundCloud under its wing, it would also be pulling in SoundCloud’s reported 200 million users worldwide (it’s unclear how many of those are paying subscribers, though). Despite Apple and Tidal’s often talked-about exclusive album streams — an elite bunch highlighted by Prince, Kanye West, Drake, Beyoncé, Frank Ocean, and Rihanna — an acquisition of this magnitude should provide quite a bit of momentum behind Spotify.
This is a developing story…