Spotify no longer purchasing SoundCloud to add to its streaming library

Swedish streaming music service Spotify was considering the purchase of fellow music service SoundCloud, with a report from The Financial Times noting that the companies were in “advanced talks” a few months ago. But now, a source at Spotify has revealed that these discussions ultimately came to naught. “Spotify has given up on its latest effort to buy SoundCloud following months of talks between the two,” TechCrunch reported.

Both companies have remained tight-lipped about all proceedings throughout the course of the potential acquisition, and this remains the case — neither Spotify nor SoundCloud has commented on the failed deal, though we’ll update the story if we hear anything.

SoundCloud, like many music streaming services, has been struggling with yearly financial losses for some time now and the recent launch of its paid SoundCloud Go service has not been enough of a success for the company to fix its balance sheet.

The service does boast one of the highest unpaid user bases in the music world, with 175 million monthly users flocking to the site to listen to and share the latest music. SoundCloud also has among the largest catalogs of tunes around, with 125 million tracks available to users for free. Those tracks are largely from relatively unknown artists and it is a popular platform for unsigned and emerging artists who often use it to gain exposure early in their careers.

The catalog of new music and free user base are obviously appealing to a company like Spotify, which currently has 40 million paid and 100 million ad-based users. There are questions as to how the Swedish company would pay for an acquisition of SoundCloud’s size. As of July, Twitter, a major investor in the service, had the company valued at $700 million.

Spotify raised $1 billion in debt-based funds this year as part of a financing deal which seemed to indicate it will go imminently go public. Most companies avoid large acquisitions — especially of companies as unprofitable as SoundCloud — before an IPO.

A significant portion of that $1 billion will likely be needed to cover Spotify’s own annual deficits. The company lost nearly $200 million last year alone. Though it has seen significant growth in paid users year-over-year, it is likely putting a serious amount of cash back into growing its own brand pre-IPO.

Article originally published in September. Updated on 12-10-2016 by Lulu Chang: Added news that Spotify is no longer considering a SoundCloud acquisition. 


Got Verizon Unlimited? Get six months of Apple Music for free

Verizon's new offer stands to benefit both Apple Music and its own subscribers, as the one-of-a-kind offer appears compelling to both existing and potential new subscribers. Find out when the offer begins, and if there are any strings…

Spotify vs. Pandora: Which music streaming service is better for you?

Which music streaming platform is best for you? We pit Spotify versus Pandora, two mighty streaming services with on-demand music and massive catalogs, comparing every facet of the two services to help you decide which is best.

Listen up! These are the best movie soundtracks of all time

Whether you're a lover of beautifully composed original scores or a fan of perfectly compiled background music, these are the best movie soundtracks of all time — from Star Wars to Garden State.

The best new music this week: Adrianne Lenker, Mitski, and more

Are you looking for the best new music? Each week, we scour the internet to find the most compelling new songs. On tap this week: Adrianne Lenker, Mitski, Big Red Machine, Mountain Man, Anna St. Louis, Marissa Nadler, and The Dodos.

Spotify is the best streaming service, but competitors aren’t far behind

It can be hard to decide which music streaming service is for you, so we've picked out the individual strengths of the most popular services, aiming to make your decision a little easier.

A wealth of rich tunes: Cash in with the best songs about money

There may not be as many songs about money as there are songs about love, but it's a close second. If you're looking for a skrilla-inspired playlist, check out our picks for the best songs about money.
Product Review

Optoma’s NuForce BE Free5 wireless earbuds cut the price, keep the good sound

Taking out all the wires and glossy paint, Optoma still gives its NuForce BE Free5 the goods to play audio better than Apple’s AirPods at a cheaper price. But are these the affordable true wireless earbuds for you?

The 15 best internet radio stations for your listening pleasure

Even in the streaming era, radio stations get some of the best exclusives and curate some of the finest handpicked playlists around. Here are the best internet radio stations, for your listening pleasure.
Home Theater

Get the most boom for your buck with the best headphones under $100

Everybody wants a bargain, and this list has a bunch. For those looking for a solid set of headphones without spending a big stack of cash, this list is is your starting point. Check out all of our picks for the best headphones under $100.

Score a new Audio Technica turntable for $129 and get a free $50 Dell gift card

Want to break out your old vinyl records without spending a fortune on a high-end turntable? The Audio Technica AT-LP60BK-BT turntable is a highly affordable way to enjoy the warm analog tones of your vinyls, and it's now on sale for $129…
Home Theater

5 gorgeous turntables that spin stacks of wax in style for less than $500

Vinyl records are awesome, but they're also finicky. To get the best out of your stacks of wax, it's best to play them on a quality turntable. Here are the best turntables to be had for under $500.

Spotify may eventually allow free users to skip all ads

Spotify is rolling out a new feature that may allow free users to skip ads whenever they want. Currently, the test is being conducted in Australia but if successful, it may be spread to other countries.
Home Theater

Crazybaby’s Air 1S true wireless earbuds won’t make you look like a dork

Audio technology company Crazybaby has launched the Air 1S true wireless earbuds, promising considerable connectivity improvements over previous models while retaining the sleek style and supreme comfort.

How to convert and play FLAC music files on your iPhone or iPad

The high-resolution revolution is upon us, and FLAC files are a popular way to store hi-res sound. But what if you’re an iOS user? Check out our article to find out more about FLAC files, and how to use them on Apple devices.