According to recent reports, Spotify has decided not to go forward with acquiring Soundcloud, an acquisition that had the potential to considerably broaden the popularity of the leading service of the streaming industry.
Rumours of the deal began to go around when Daniel Ek, the founder of Spotify expressed his wish to establish a direct relationship between users and artists. Now that is something Soundcloud is very well-known for, especially with its feature of commenting on tracks.
Almost a month after, the rumours were confirmed once it was formally announced that Spotify was negotiating to purchase Soundcloud. According to a new source, however, it now seems that the deal is not going through after all, with Spotify declining to go move forward with the deal.
Speaking to TechCrunch, the source revealed that the reason for the failure of the deal was Spotify “doesn’t need an additional licensing headache in a potential IPO year.” This may happen on account of the fact that with the purchase of Soundcloud, Spotify would have to open-up further discussions for negotiating with labels – which it already does for its own streaming services.
According to people involved in the tech community, Spotify may indeed go public in 2017. Therefore, bringing Soundcloud on board might delay this from happening, which in fact may be the reason why Spotify has backed out from the deal.
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