SoundCloud, which allows users to upload, promote, and share audio recordings ranging from music to podcasts, has upwards of 175 million total listeners a month, which could bring a huge influx of customers to Spotify and give it an edge over Apple.
Spotify has 40 million paying subscribers compared to Apple Music's 17 million paying subscribers, but Apple Music's numbers have been growing steadily since its 2015 launch. Apple Music is also backed by the strength of Apple's subscriber base, which dwarfs that of most other music services and gives the company a huge pool of potential future subscribers.
As competition heats up between Spotify and Apple Music, the two have become bitter rivals and have been involved in some public battles over issues like exclusivity, the App Store, and free listening tiers in recent months.
SoundCloud recently introduced a new subscription service designed to compete with Spotify, Apple Music, Pandora, and other music streaming options. SoundCloud Go, priced at $9.99, gives users on-demand ad-free access to 125 million tracks, including premium licensed content.
With a SoundCloud acquisition, Spotify could potentially add all of that user-created content to its own music catalog, giving customers more original content to listen to along with its existing licensed content.