A few weeks ago, Spotify announced that they surpassed 40 million subscribers; this growth rate doubles over the streaming service’s rival Apple Music. While SoundCloud recently launched a paid subscription service, they haven’t made enough profit to sustain their once-free music streams. Now, it seems as though Spotify is currently seeking to formally acquire SoundCloud, according to The Financial Times. The plot continues to thicken, as the streaming wars ensue.
SoundCloud has been in financial trouble for some time now, losing upwards of $70 million over the last two years, according to a report from February. Earlier this summer, the company considered selling their online streaming service for $1 billion. The report made it clear that, while the company had “adequate resources to continue in operational existence for the foreseeable future,” SoundCloud was heavily reliant on “further capital investment” to continue operating in 2015.
Now, we see another potential – for the Spotify giants to step in and take over SoundCloud. If they were to successfully do so, the company would acquire all 200 million SC users. This would be an interesting turn of events, as both companies started in October of 2008. The details remain unclear of how the transition would navigate paid subscriptions versus free memberships, but Spotify’s acquisition of SoundCloud would be an undeniable win for Spotify.
Let’s see how this one pans out…
[H/T CoS]