Swedish music-streaming service provider Spotify is in advanced talks to acquire German rival SoundCloud, the Financial Times reported on Wednesday, citing people briefed on the discussions. SoundCloud’s founders and investors were exploring strategic options for the company, including a sale, that could value it at $1 billion, Bloomberg reported in July, citing people familiar with the matter.
Music-streaming companies have struggled to turn a profit amid rising competition from larger players such as Apple, Amazon and Google. Spotify is currently the largest music streaming service globally with over 40 million paid subscribers but it is under pressure from Apple Music. Apple recently reported that it has 17 million paid subscribers.
Watch all our tech videos below
Amazon is also preparing to launch a standalone music-streaming subscription service, Reuters reported in June, citing people with knowledge of the matter.
SoundCloud declined to comment, while Spotify could not immediately be reached for comment.
SoundCloud has over 200 million content creators on its platform and offers $9.99 a month ad-free streaming service. SoundCloud was once considered Spotify’s prime rival in the streaming industry and with the acquisition, Spotify could find another way to boost its growth and user base.
Spotify has tried a lot of new features in order to tackle Apple Music’s growth. Spotify recently released a playlist called ‘Release Radar’, which made it easier to find new music. Release Radar shows new tracks from artists a user frequently listens to, making music discovery simpler than ever before.
Interestingly SoundCloud has never reported profit since its inception. The company publicly reported its accounts in 2014 indicating widening loss on the operating side.
(Written with inputs from Reuters)