Spotify drops efforts to buy SoundCloud in prep for IPO plans - report

Apple's chief rival in on-demand music, Spotify, has backed away from trying to buy another important player in the space, SoundCloud, according to a report.

Although the two companies were in negotiations for months, any chance of a deal is said to have died in the past week, a source told TechCrunch on Thursday. Spotify was allegedly worried that buying SoundCloud would hurt its preparations for a stock IPO, which has been rumored for 2017.

Specifically, Spotify was said to be concerned about the cost and complexity of licensing. SoundCloud has an even larger assortment of tracks than Spotify, since in addition to major and indie labels, many individual artists and producers can upload their music, much like YouTube. The AppleInsider podcast can be found on both iTunes and SoundCloud.

Earlier reports suggested that Spotify had declined a SoundCloud takeover twice in the past two years, in those cases because of price.

Like Spotify, SoundCloud has yet to turn a profit, although its launch of SoundCloud Go earlier this year led to an estimated 43 percent surge in annual revenue. Go offers on-demand streaming of a larger catalog than free users get, along with perks like offline caching.

8 Comments

cali 3494 comments · 10 Years

About 7 years ago

How has Apple Music not overtaken SoundCloud in the indie market?!

i thought one of the main drivers for Apple Music was independent artists? People were talking about Apple Music being the App Store of music.

linkman 1040 comments · 11 Years

IPO for a company that has lost money every quarter? At least 75 million users with 20 million of them on their paid plan and their business model is still not working after 8 years? Yes, investors will pounce on the chance to invest in that IPO because they are apparently insane.

mr o 1045 comments · 18 Years

I <3 Soundcloud.

They are the only music platform that got the social layer right.
And their iOS app is great too. Very focused on the one thing that really matters, fine-grain control over your music: songs AND long DJ sets.

>:x

Roger_Fingas 148 comments · 8 Years

linkman said:

IPO for a company that has lost money every quarter? At least 75 million users with 20 million of them on their paid plan and their business model is still not working after 8 years? Yes, investors will pounce on the chance to invest in that IPO because they are apparently insane.

It's not that the business model isn't working, it's that they've been investing in licenses and growth. A board member recently said that the company could turn a profit next year.