I am a huge fan of SoundCloud, owing to its immense catalog of electronic music and its unique ability to discover new material on the platform. The service has in recent times faced competition owing to the entry of new players into this segment which has piled pressure on it to monetize. There was an announcement a few months back that the service was placing a $1 Billion price tag on anyone interested in acquiring it.
The Financial Times now reports that Spotify, a rival music streaming service is ready to spend $700 Million in acquiring SoundCloud. Among the reasons why Spotify would be interested in the acquisition includes buffering themselves up in readiness for their IPO, while at the same time looking to get access to a large number of content creators.
Early in the year, SoundCloud raised $100 Million in a round of funding, with Twitter pumping in $70 Million. The funding valued the company at $700 Million. The platfrom has 175 Million unique monthly users across the globe with 40 million registered users. Billed as a platform for creators, the service has 12 million content creators who it charges $7 and $15 per month for the ability to upload more than the standard 12 hours of audio, plus analytics and more content controls.
As part of its recent efforts to monetize, the service announced the launch of SoundCloud Go, a music streaming service that charges users $9.99 a month for premium tracks, along with offline listening, and no ads. It has also signed deals with record labels to allow for the launch of the streaming service. As recent as yesterday, SoundCloud allowed users to easily discover albums on the platform thanks to the newly formed relationship with record labels.