For the sake of competition with Apple and Amazon, streaming service Spotify intends to buy SoundCloud

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The owners of the Swedish online music service Spotify intend to buy German audio hosting SoundCloud.

Co-founder of Skype and Rdio music service (acquired by Pandora in 2015) Niklas Zenstremm is not sure that independent music streaming projects will be able to successfully compete with such major players as Apple and Amazon. After all, the latter are ready to suffer losses from streaming just in order, for example, to sell more iPhone or Echo speakers.
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The launch of streaming services by these companies forces independent market players to unite , notes Financial Times. However, in this case, negotiations on the transaction still do not guarantee that it will take place.

While Spotify remains the market leader in music streaming: it has 40 million paid subscribers. The service Apple Music - 17 million.

On average, the base of downloaded tracks from streaming services has 30 million records. SoundCloud has four times more. But despite this, he has not yet become profitable. The latest data on the financial performance of this service was published two years ago: in 2014, SoundCloud received 17.4 million euros in revenue with an operating loss of 39 million euros.

SoundCloud has a significant advantage over other services - it is supported by a large community of musicians. In March 2016, a streaming service appeared paid subscription.

In mid-July, Twitter acquired a share in the German service. The American company showed interest in hosting after the closure of its own streaming service Twitter Music. Details of the transaction were not disclosed, but, according to some media reports, Twitter has invested almost $ 100 million in SoundCloud. At the same time, the estimate of the German company rose to $ 700 million.

In July, Bloomberg reported , citing its own sources, that the SoundCloud management is considering the future development of the company - including its sale for $ 1 billion.

In the same month, employees of several major music companies told Vedomosti that Spotify’s audio hosting does not preclude the return to the Russian market after a year and a half away.

Yesterday, September 29, Spotify entered the Japanese market. The service will be available on smartphones, tablets, PCs and PlayStation consoles. Representatives of the company claim that Spotify is the first music service that offers freemium to Japanese music lovers.

Independent music services are experiencing difficult times, despite the fact that the overall streaming music market is growing: its growth last year was 45.2%.

According to the American Recording Industry Association (RIAA), the largest US record labels in the first half of 2016 increased revenues by 8.1% compared to the same period in 2015 to $ 3.4 billion. This is the highest growth rate since the late 1990s, when the music industry received revenues mainly from CD sales.

But industry revenues are growing mainly due to streaming services and online radio.