Not too long ago, it was reported that Spotify would be purchasing SoundCloud, and while there doesn’t appear to be any sort of confirmation or even a leaked sum of how much the deal could be worth, the two firms are said to “be in advanced talks”. For the streaming industry, Spotify is definitely the number one name, but with Apple Music quickly gaining ground, and firms like Google Play Music often offer better value packages. All of this means that Spotify is having to rethink things a little, and while the firm has definitely added a number of new features that have helped Spotify stay on top, it looks like purchasing SoundCloud is another step to solidify their position. If that were to happen, Twitter stands to get a portion of that cash.
Back in June 2016, Twitter invested $70 Million into SoundCloud, which is currently valued at $700 Million. Now, if Spotify were to purchase SoundCloud for more than $700 Million, which is likely given that the firm has gained in popularity steadily, then Twitter would get some pretty decent returns on their investment. The possible cash infusion for Twitter, a firm that’s on the look out for a buyer themselves, if recent reports are to be believed, would be a nice shot in the arm. There could also be better options for Twitter here though, as a closer relationship with Spotify – one which has SoundCloud’s 100 Million plus song library – could help the firm appeal to a younger audience, perhaps even more so than it already does. Along with their recent interest in the NFL, Twitter is looking to get into the media business, competing with Facebook’s explosive success they’ve had with video. Music is a big piece of the media puzzle, and if Twitter could form some sort of partnership with Spotify, it could benefit the firm much more beyond a simple return on investment.
Considering that the reports of Spotify purchasing SoundCloud have not been confirmed just yet, it’s tough to say what would happen to the landscape after such a deal, but it’s interesting to see how interconnected these firms really are, especially as we see them as being completely separate entities a lot of the time.