In September 2019, Spotify bought SoundBetter, a website helping musicians to find collaborators including songwriters, studio musicians, producers and mixing/mastering engineers, as well as studios to record in. Two years later, it has sold the business back to its founders Itamar Yunger and Shachar Gilad.
“Together, Spotify and SoundBetter benefited from many synergies, but as SoundBetter continues to evolve, both parties agreed that the company is best positioned for the next stage of growth by returning to the founders that have been committed to shepherding it from the beginning,” said Dom Sanya, Spotify’s global head of creator marketing.
It’s very much an amicable parting of ways according to the statements.
“Spotify accelerated SoundBetter’s trajectory, helping us reach hundreds of thousands of musicians around the world. SoundBetter today has a larger community of amazing artists creating more and higher quality music, and a wider array of expanded services,” said Gilad. “We are grateful for the partnership and look forward to continuing to enable the careers and passions of many more professional musicians.”
SoundBetter’s business model is commissions: it takes a small fee when someone is hired through its service. It’s reasonable to surmise that Spotify is focusing more on other aspects of its tools for artists, including paid ones like marquee, audio and video ads and (not ‘paid’ as such, but used in exchange for a lower royalty rate) its much-discussed Discovery Mode.
Spotify never disclosed how much it paid for SoundBetter in 2019. In its annual report for that year, the company gave prices for “material” acquisitions including Anchor (€136m), Gimlet Media (€172m) and Parcast (€49m) but not for SoundBetter, signifying a price lower than the bar considered noteworthy for investors.
As recently as February 2021, SoundBetter was praised in Spotify’s ‘Stream On’ press launch, with the company’s head of product marketing, marketplace, Charleton Lamb describing it as a “powerful tool for creation and collaboration” sitting alongside the Soundtrap online recording studio that Spotify acquired in 2017. Soundtrap remains part of the company’s creator strategy, but SoundBetter will now return to life as an independent marketplace.