“Did Daniel Ek just say that Spotify is buying SoundCloud?” asked Business Insider in a story published in mid-August, based on an interview Spotify’s CEO had given to Swedish TV channel TV4.
As it turned out, he had said no such thing, but he had talked about the need for Spotify to help artists connect with fans more directly: “trying to connect them and finding opportunities for artists to express themselves and for users to give feedback to the artists”.
That’s a long way from saying you’re going to buy SoundCloud, but now the Financial Times is saying exactly that, reporting yesterday that Spotify is in “advanced talks” to acquire SoundCloud, following “reasonably detailed” negotiations last Spring over a potential deal.
The deal would bring together one freemium service with more than 100 million listeners with another that claims 175 million across the web. Or, as one wag on Twitter put it: “Company haemorrhaging money with massive debt buying company haemorrhaging money with massive debt. Looks good.”
Flippancy aside, though, the prospect of a Spotify / SoundCloud merger is fraught with complexities: that expanded catalogue of remixes, mash-ups and rare tracks may be tempting, but the licensing may be a quagmire; how would SoundCloud live on as an independent service, and what would the change of ownership mean for SoundCloud Go’s deals; if the deal is about creating an even bigger funnel for Spotify Premium, how many of those 175 million listeners are really ripe for upgrading? And so on.
At the same time… Spotify + SoundCloud does have the potential, as Ek’s interview touched on, to put a rocket under the way Spotify deals directly with artists, and connects them to their fans. It’s what Apple Music tried to do – mostly unsuccessfully – with its Connect feature.
The complications of merging the two back-ends, let alone the consumer-facing services, may be hellish; the economics may be frightening; but there is definitely something powerful to be unlocked if this acquisition were to happen.
On a wider note, though, the FT’s report should focus us again on the question of what consolidation lies ahead for independent (i.e. not owned by Google, Apple or Amazon) streaming services.
From Deezer, Tidal and Rhapsody to Pandora, Vevo and even Spotify itself, every player in this space’s long-term future and/or ultimate destination is up for discussion. An interesting year lies ahead…
Tools: platforms to help you reach new audiences
Tools :: Wyng
Through Music Ally’s internal marketing campaign tracking, we’ve recently discovered an interesting website by the…