Now Tech Crunch is citing an anonymous source that says Spotify ended the talks because “it doesn’t need an additional licensing headache in a potential IPO year.” While Spotify going public hasn’t been confirmed, according to the source, the company is preparing for an IPO and it didn’t want Soundcloud’s open platform causing issues with its licensing deals with record companies.
Of course, Soundcloud’s biggest plus is the fact that any artist can upload their music to it—it’s a platform deliberately designed for artists and listeners operating outside the mainstream record industry. The possibility of bringing that openness to Spotify was enticing for both listeners and artists, but unfortunately, with this deal off the table, it seems independent, emerging and unsigned artists are still locked out of the fastest-growing market of music listeners.
Reps for Spotify and Soundcloud have yet to comment as of this writing.
