Spotify is reportedly holding advanced talks with SoundCloud about a possible acquisition. The exact reason remains unknown, but one possibility is an effort by Spotify to remain one step ahead of Apple Music, which has risen in popularity since its launch out of beta earlier this year.
First reported by the Financial Times, the move would pair together two of the most used music services out today. This month, Spotify announced it had hit 40 million paying subscribers (100 million total listeners), which trumps Apple Music’s 17 million users — but it’s only been around for a year, much less time than Spotify.
With the addition of SoundCloud, Spotify could get a service with social capabilities, something it’s lacking. In addition, there’s also the inclusion of additional media such as podcasts, videos, and more. Of course, with rumors of Spotify planning an initial public offering next year, bringing on board a company with more capabilities could show investors the potential of the music service to compete against those with a more sizable war chest.
At our MobileBeat conference, Spotify’s lead on bots and A.I., Brendan O’Driscoll, talked about his goal of creating a “music concierge” that would surface music that matches your mood and preference. It’s wishful thinking, but the intelligence that SoundCloud may possess could help Spotify evolve from a music service to something much more.
Spotify has raised $1.56 billion in venture capital, including $1 billion in debt financing in March. SoundCloud has received more than $193 million.
We’ve reached out to both Spotify and SoundCloud for comment.
Updated at 4:12 p.m. Pacific on Wednesday: Both Spotify and SoundCloud have declined to comment.