Deezer to face up to Spotify, including a potential SoundCloud buyout

A few months after SoundCloud were reported to be broke and likely bought out soon they have, so they say, recovered. But Deezer still have their eyes on the streamer.

It’s been a tough year for SoundCloud, having only just recovered from numerous reports claiming they didn’t have enough cash to make it past this year. In addition, since last year SoundCloud have lost 100 million users and went from offering themselves for $1 billion to a $250 million offer. The past few months they’ve been getting back on track, ditching founder and CEO Alexander Ljung and investors approving $170 million in emergency funding.

Before the drama and Ljung’s dismissal Deezer were in talks to potentially purchase SoundCloud “at the right price”. A “senior music source” spoke at the time, saying: “Deezer is making a serious run. There will be a lot of consolidation, if you are Deezer or Spotify. SoundCloud’s massive user base – one that is melting as it grapples with a shrinking pile of cash – lets you convert into a much bigger player.”

Deezer’s chief executive Hans-Holger Albrecht has recently revealed their plans to stand up against larger competitors like Spotify and Apple Music. As they’re struggling to make an impact beyond Europe where they started, Albrecht says they’re looking to target smaller markets that aren’t already overwhelmed by major streaming services.

Speaking to Reuters, Albrecht said: “I strongly believe in the localisation of content. While Spotify is mainly playlist-focused, we are betting on local differentiation, and this has helped us become number one in gospel in Brazil.”

Leaked documents reveal that SoundCloud don’t predict profitability until 2020, a long time to be stepping on shaky ground in the booming music streaming industry. This could make them more open to reducing their expectations and accepting a smaller buyout for their community-based music site. Deezer certainly have an interest, and standing up to the big guns is going to require something big.

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