Spotify is probably buying SoundCloud, so that's crazy

Spotify is probably buying SoundCloud, so that's crazy

MusicSeptember 29, 2016 By Brian Frederick

SoundCloud wasn’t going to last forever.

The signs, they’ve been there teasing that someday, something was going to come in and swoop it up. That day seems to be close, and that something looks to be Spotify — according to a recent article posted in the Financial Times.

Since day 1, SoundCloud — the online streaming service that found millions of fans in its support of independent, vinyl-digging basement-producers — was doomed for falling off the fence into one of two groomed yards of business. Either it was going to work, and people were going to willingly pay for it (they haven’t) so it could assume its role as a competitive entity (it hasn’t), or it was going to sell to a bidder worth a shit, eaten by competition while walking away with a serious payday.

Another option, of course, could have been the way of Groove Shark, imploding completely under the weight of lawsuits and poor performance. SoundCloud has spent countless millions and has plead its case to labels for many years so that fate wouldn’t happen. This option wasn’t very likely given the race for streaming superiority …

But now here we are, rumors flying around the web that Spotify is in “advanced negotiations” of buying SoundCloud. Which makes a ton of sense, and is going to be great for fans of SoundCloud.

SoundCloud wasn’t always going to stay completely free. It couldn't. The Internet isn’t a soup kitchen; it makes tech geeks and venture capitalists a fuck-load of money by the second. Aside from Craigslist (Which is an interesting anti-authoritarian story on its own), nothing online is free to anyone. Not users, not advertisers. SoundCloud’s “GO” pay tier was one way to subvert the whole free thing, but that apparently failed.

Which is why Spotify is here now.

While both companies have yet to respond to media inquiries about a deal — each claiming they have “no info” or “no comment” — the likely buyout is a good look for both companies. At over 40 million paying subscribers already, Spotify is above and beyond any other streaming platform out there right now, toppling Apple’s rumored 17 million.

But wooing the independent music producers and smaller artists has always been a challenge for Spotify. The culture wasn’t there. The camaraderie wasn’t there. No one wants to be where Justin Bieber or Lady GaGa receives special treatment. That’s not indie. That’s not hip.

Buying SoundCloud is Spotify’s way of potentially converting some of its 100 million users to become paid subscribers. The number being thrown around right now by other outlets about the cost of the buyout is somewhere near the $1 billion mark. Even if just 5 percent of the 100 million users become paid subscribers in the future (to access both Spotify’s gargantuan library on top of SoundClouds already discoverable platform), it would translate to about $600 million in monthly fees per year, or about $120 million after its reported 80 percent goes back to labels. 

And it means Spotify has 5 million more music lovers that Apple music does not.

Announcements like these don’t leak for any reason, though. If it’s of any interest to you, pay attention to what Apple does next. Will it put up its own offer? Try and screw Spotify again? Will everyone merge into one big streaming behemoth that runs the entire planet from here to the end of Trump’s decades-long dictatorship? Who knows.

But (if it happens) a Spotify buyout of SoundCloud will send the already sketchy wave pool into a fierce crash of unpredictable tides. Apple has all the money in the world to stay a viable competitor, meanwhile Spotify continues to lead the reigns as to the future of music.

Then there’s Tidal, all alone and probably not going to see much of 2017 … cue sad horn.