Grows the business of streaming, and Spotify wants to buy SoundCloud – The Reporter

Spotify is one of the leading brands in the growing business of streaming

Spotify, one of the main companies of streaming music, is located in “conversations advanced” to buy its rival SoundCloud, as reported by Financial Times newspaper.

The platform in question is known to promote new artists or unknown, and by the strong support of the community that make up their users.
SoundCloud was valued in the last few months with a market value of around u$ s 700 million. Or at least that is the figure that was when Twitter became interested in the platform (see box).

Spotify on both, which has more than 40 million paid users and more than 100 million active users, it could also be preparing for its ipo for the first half of 2017, according to some media and relieves Eleconomista.is. However it is not yet profitable, and in 2015 it lost$ 194 million.

SoundCloud in the meantime, with headquarters in Berlin, has not managed to put its accounts in order. For the portal to Music Business Worldwide, the company lost$ 44,19 million in 2014 with a revenue of u$ s 19,37 million. In addition, SoundCloud, which is estimated to account, with 175 million users, launched in march Soundcloud Go, a premium service to compete directly with Spotify and the Apple Music. With a price of u$ s 9,99, the offer is similar to its competitors, but it is unknown how many use it.

A competitive market

The potential purchase of SoundCloud on the part of Spotify (which started to operate yesterday in Japan, which means the entry into the second largest music market in the world) makes sense as part of the consolidation that it is facing a competitive market and each time with greater quantity of players.

Companies as Pandora, iHeartMedia and Amazon also plan to launch similar services, a situation that promises to tighten even more the war between Spotify and Apple Music, which has a total of 17 million subscribers. Tidal for its part, the service created by Jay-Z has managed to make a major void in the business and there was even talk that Apple could buy it.

however, due to the money that these services have to pay to the music labels to be able to offer the music of the artists that they represent, it is difficult to get to generate profits. According to some experts, the purchase of SoundCloud could help in any way, because in addition to adding subscribers, Spotify would have access to a good number of artists and bands emerging without the need of dealing with intermediaries.

But on the other hand, according to a report by Music Business Association that plays Variety, the industry of streaming is finally making money; and the well-known playlists are already more popular than the albums. For example, sales in the recorded music grew by 8.1% and in the first half of 2016, the industry generated u$ s 3400 million.

In the united States, revenues from streaming grew by 57%, i.e. u$ s 1600 million in 2016 -almost half the sales of the industry.
the study also notes that the playlists represent 31% of the music listened to and the albums are placed in second place, 22%. But what’s more interesting is the fact that the songs (the singles or individual tracks) are representing 46% of the music being listened to.
Twitter also participates

Yesterday, also met the news that Twitter acquired a part of the music service SoundCloud. According to information from the Swedish newspaper Dagens Industri, the social network paid u$ s 70 million to stay with the 11% of the company.

Twitter announced this acquisition in the midst of the incessant rumors linking the company founded by Jack Dorsey with a likely sale as soon as possible. Giant corporations like Google and Disney, the more the technological Salesforce.com acknowledged to be interested in staying with the microblogging network, which has a little more than 300 million users.