Spotify has gone cold on rumored SoundCloud deal

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Spotify, the world’s top on-demand music service, is not buying Berlin, Germany-headquartered audio distribution platform SoundCloud after all, TechCrunch has learned.

Spotify has reportedly given up on its latest effort to buy SoundCloud realizing, after months of talks, that any such deal would probably negatively impact its impending initial public offering (IPO) and expected expansions in China, Russia and South Korea.

Spotify went cold on SoundCloud because “it doesn’t need an additional licensing headache in a potential IPO year.” The deal reportedly died this past week. Keep in mind that the Swedish music service hasn’t officially said it will go public in 2017.

The Financial Times was first top report nearly three months ago that Spotify was in advanced talks with SoundCloud’s management over the possibility of acquiring the German startup. Spotify apparently declined to acquire SoundCloud two other times over the past two years, said the financial newspaper.

Spotify currently operates in 60 markets and has more than 40 million paid subscribers.

Apple Music is available in 115 markets, has 20+ million paying customers and over 40 million songs in its catalog. It’s believed SoundCloud has upwards of 200 million registered users and about 175 million monthly listeners.

For the most part, Spotify has been bleeding money since its inception but its investors are adamant that service is going to turn a profit next year.

Spotify and SoundCloud are available at no charge on the App Store.

Source: TechCrunch