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

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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.

Comments

  • Reply 1 of 8
    calicali Posts: 3,495member
    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. 

  • Reply 2 of 8
    linkmanlinkman Posts: 916member
    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.
  • Reply 3 of 8
    mr omr o Posts: 1,046member
    I <3 Soundcloud.
    1. They are the only music platform that got the social layer right. 
    2. 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


  • Reply 4 of 8
    Roger_FingasRoger_Fingas Posts: 145member, editor
    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.
  • Reply 5 of 8
    MacProMacPro Posts: 18,293member
    Dead man walking.
  • Reply 6 of 8
    linkmanlinkman Posts: 916member
    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.
    You believe that BS?
  • Reply 7 of 8
    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.
    And if pigs could fly they would be airplanes... I predict that we _could_ see a flying pig, We just need to believe in it p

    But on a more serious note. The problem is with the owners/stakeholders different goals (short/longterm) in the big picture which isnt the same that spotify is experiencing. How can Spotify (which is partly owned by the big labels) go against the labels when the labels themselves cant see where the shoe is squeezing? Yes they know the shoe is squeezing but they aren't brave enough to do the necessary things because they involve risks that they aren't willing to take and therefore risking their whole influence in long term.
    edited December 2016
  • Reply 8 of 8
    Roger_FingasRoger_Fingas Posts: 145member, editor
    linkman said:
    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.
    You believe that BS?
    Not necessarily, but now that they're in a large number of countries, profit is on the horizon. Also, remember that Amazon wasn't profitable for the longest time but still became a giant along the way.
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