News - 04/01/2017

Google is interested in buying SoundCloud, according to rumours

Google is interested in buying SoundCloud, according to rumours

According to "Music Business Worldwide", high-level rumors are now beginning to bubble that Google is very interested in acquiring Berlin-based company SoundCloud – which boasts more than 175m users around the world.

SoundCloud was reportedly hoping to sell for $1bn to Spotify in the second half of 2016. It’s the same price that put off Twitter (now a SC investor) from buying the firm in 2014. More realistically SoundCloud could now be acquired for somewhere closer to $500m – and Google is said to be the current favorite.

As "Music Business Worldwide" explains, a rough approximation (not taking into account individual value of shares – which are likely to increase these stakes slightly) gives Universal a 4% holding in the company, with Sony on 3% and Warner on somewhere between 1% and 2%. If SoundCloud was sold for $500m, the majors would therefore get a cut of around $45m between them. These share percentages are likely to have been diluted as SoundCloud has taken on more investment since agreeing to apportion Universal and Sony equity as part of global licensing deals in 2016.

If SoundCloud does sell to Google, it could be the beginning of a major shake-up in music streaming land in 2017.

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