Music streaming company Spotify announced on Friday, 17 November that it has purchased online music and audio recording studio Soundtrap, although no financial details were made available.
“Soundtrap’s rapidly growing business is highly aligned with Spotify’s vision of democratizing the music ecosystem,” Spotify said in a statement.
Spotify is aiming to file its intention to float with U.S. regulators by the end of the year to list in the first or second quarter next year, according to comments from sources back in September.
Officially launched on 7 October 2008 by a startup, Spotify AB in Stockholm, Sweden, Spotify is a music, podcast, and video streaming service that provides digital rights management–protected content from record labels and media companies.
Classified as a freemium service; the service’s basic features are free with advertisements or limitations, while additional features, such as improved streaming quality and music downloads, are offered via paid subscriptions.
The music environment is also very flexible, with users able to browse or search for music using parameters such as artist, album, genre, playlist, or record label. Users also have the ability to create, edit, and share playlists, share tracks on social media, and make playlists with other users. As of June 2017, it had more than 140 million monthly active users and more than 60 million paying subscribers as of July 2017 as well as access to more than 30 million songs.
Spotify is available in most parts of Europe, the Americas, Australia, New Zealand, and parts of Asia. It is available on a variety of devices, including Windows, macOS, and Linux computers, as well as iOS, Windows Phone and Android smartphones and tablets.
Royalties are paid out based on the number of artists’ streams as a proportion of total songs streamed on the service, unlike physical or download sales, which pay artists a fixed price per song or album sold. They distribute approximately 70% of total revenue to rights holders, who then pay artists based on their individual agreements.
However, the service has received criticism from artists and producers, including Taylor Swift and Radiohead singer Thom Yorke, who feel that it does not fairly compensate music creators as music sales decline and streaming increases.
In April 2017, the company announced that artists will be able to make new album releases exclusively available on the Premium service for a maximum of two weeks if they are part of Universal Music Group and Merlin Network, as part of its efforts to renegotiate new license deals with record labels for a reported interest in going public.