The latest chapter in the music stream service wars involves the Swedish music-streaming service Spotify buying Soundcloud in order to better compete with Apple Music.
According to the Financial Times, the two companies are in advanced talks to have Spotify swallow Soundcloud, a notoriously clunky platform has the reputation for being the “Youtube of music” (nevermind that Youtube has its own music streaming service), and integrate their platforms.
The world of subscription music streaming services has a few dominant players, all living under the shadow of Apple’s growing service. Spotify, with over 40 million paying subscribers, believes it will be stronger with a SoundCloud acquisition, allowing it to entrench its dominance in the increasingly competitive field of streaming music.
The Swedish connection
Like Spotify, SoundCloud was also founded in Sweden, but is now based in Germany. Today, it is the nexus of musicians looking to disseminate their homemade sounds, many of which include internationally recognized musicians’ copyrighted material. Because of the crowd-sourced nature of the website, the site has the largest catalog in streaming by a factor of four. According to Techcrunch, SoundCloud has more than 125 million tracks, with Apple Music and Spotify lagging behind with a paltry 30 million tracks.
SoundCloud has approximately 175 million unique users, and is a cottage industry artist’s dream. If you make your own music, you can upload your music to the platform and create a URL to access your uploaded library from anywhere. This helps artists promote their own work, and broaden their audience on social media.
The Core threat
Apple Music was only launched last year, as the household brand tried to play catch up with the rest of its competitors, in a sector that’s quickly becoming somewhat crowded. Apple Music was also in the news recently because Apple tried to force Spotify to use its billing system in the Apple store. Cries of monopolistic and anti-competitive behavior forced a truce between the two companies.
Only the Strong Survive
Apple has so many advantages because their devices naturally market their own music streaming service, Apple Music. This makes Apple the elephant in the room for a company like Spotify. Spotify’s attempt to purchase SoundCloud may be the best way that the company can aggressively compete with Apple Music in the longterm.
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