Spotify on Cloud9 – The Saturn Herald

Co-founders of SoundCloud Ericwahlforss and Alexander Ljung

Spotify, a Swedish music, podcast and video streaming service, pounced on to buy Berlin-based music streaming start-up Sound-Cloud. As SoundCloud’s 200m-strong community is to join Spotify’s 100m, which include 40m paying subscribers, and will compete with their biggest US rival Apple Music who has 17m paying subscribers. When the deal concludes we have major European superpower in digital music.

Spotify is believed to be preparing for an IPO sometime next year by increasing its paid subscribers and diversifying its content through video and podcasts.

SoundCloud is the world’s largest social sound platform where anyone can create sounds and share them everywhere and their biggest asset is the strength of the creative authors and aspiring musicians, who build a wide variety of sounds and shares through Twitter, Tumblr, Facebook and Foursquare.

SoundClouds launched in 2008 by co-founders Alexander Ljung and Eric Wahlforss, launched New Pro, which allows more music and audio creators to be heard everywhere without borders. Over 10,000 apps created on SoundCloud’s open platform with integrations with professional music software like Pro Tools and Cakewalk.

After eight years SoundCloud is going through a rocky patch, as their last reported turnover of£15.14m (€17.4m) and an operating loss of £33.93(€39m) in 2014, with big labels like Sony have pulled their music from the platform and the company may be forced to give bigger equity to win licensing arrangement.

SoundCloud is the YouTube of Music as creators can upload music and recording including bedroom demos, Dj sets of other people’s dance tracks and even unofficial remixes which original artists didn’t authorise, directly and cut the middleman, instead of having to go through a record label or distribution service. SoundCloud, worked with rights management service Dubset to pay the original content creators. SoundCloud’s 125million tracks compared to Apple Music’s 30 million. Spotify’s polished apps alongside the official music could be a winning combination. Spotify raised £770m ($1bn) in debt financing earlier this year give them the financial clout for acquisiton.