Spotify no longer in talks to acquire Soundcloud

Spotify has reportedly backed out of talks to purchase Soundcloud, an acquisition that would have broadened the scope of the industry’s leading streaming service.

Rumors of the proposed deal surfaced in August when Spotify founder Daniel Ek mentioned he wanted to establish a more direct relationship between artists and users, something that is a special aspect of Soundcloud, specifically with commenting on tracks.

Those rumors became facts nearly one month later when it was announced that Spotify was in advanced talks to acquire Soundcloud. Now, according to a source close to the discussion, the deal has run dry with Spotify declining to go through with the deal.

The source, who spoke with TechCrunch, said the deal didn’t go through because Spotify “doesn’t need an additional licensing headache in a potential IPO year.” This is due to the fact that purchasing Soundcloud would open up even more discussions for negotiating with labels, something Spotify already deals with for its own music streaming.

Many in the tech community expect Spotify to finally go public in 2017 and bringing on Soundcloud could delay that process, which might be a reason for denying the deal.

Harrison is Mixmag's East Coast Editor. Follow him on Twitter here

[via: TechCrunch]