INTO THE STREAM
Several suitors seen circling SoundCloud
A new phase of consolidation is about to hit streaming music services.
The latest player to go on the block is SoundCloud, a destination second in size only to YouTube — and popular with youngsters trying to get their music noticed.
Based in Berlin, SoundCloud has 175 million users and is being eyed by a host of players, The Post has learned.
SoundCloud investors last year had hoped for a $1 billion valuation but it may now have to settle for $700 million or less, according to a report earlier this year from Recode.
Deezer, the France-based streamer owned by Len Blavatnik’s Access Industries, is one of the suitors, sources said.
Blavatnik also owns Warner Music Group.
Spotify was in advanced talks to acquire the venture last September, the FT reported, but there’s been nothing but crickets about those talks since then.
Apple, always mentioned as a possible acquirer when consolidation of music companies is at hand, is again said to be in the mix as it eyes a free ad-supported bolt-on to its 20 million paid Apple Music, sources said.
Apple’s Jimmy Iovine had previously been interested in SoundCloud but some Cupertino insiders last week were talking down the prospect, calling it “fake news.”
Of course, a number of private equity players are circling, industry sources said.
While it’s unclear who among the buyout bigwigs in serious pursuit and who is casually kicking the tires, KKR is interested in the space — having come close to making a $250 million investment in Pandora weeks ago.
Spotify, which is the leader in paid streaming music with 50 million paid subscribers, is also said to be discussing a bid, according to sources close to the talks, while Google was said to be circling, as well.
SoundCloud is being viewed as a key chess piece in the game to build a rival to the Big Four: Spotify, Apple, Amazon and YouTube.
Of all the suitors, Deezer is said to be the most interested.
“Deezer is making a serious run,” said a senior music source. “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, said a source familiar with talks.
Only a few months ago, SoundCloud was struggling to get suitors to the table. In March, it secured $70 million in debt financing.
Last year, Jack Dorsey’s Twitter made a $70 million investment in the service, valuing it at $700 million.
The company has been losing key staff, including Stephen Bryan, the chief content officer.
SoundCloud declined to comment. catkinson@nypost.com