In what has turned out to be a big few weeks for Spotify, acquiring music discovery start-up Sonalytic is the company’s latest move.
Fresh from securing another landmark figure of paid subscribers, Spotify isn’t resting on its laurels. Instead, the Swedish company is continuing its acquisition push, with music discovery a constant area of interest.
Today (7 March), the company revealed the acquisition of Sonalytic, echoing its 2016 move to snap up Dublin music discovery start-up Soundwave.
Sonalytic, much like Soundwave, uses its software to identify songs and other forms of audio, as well as track certain material. Considering how the copyright situation operates in streaming, the move makes sense.
“[Sonalytic’s] advancements in audio feature detection will be used in several ways to advance Spotify’s mission; from improving Spotify’s personalised playlists to matching songs with compositions to improve our publishing data system,” said the company.
Spotify’s shift from loss-maker to profit-maker may soon be realised, following recent news of a 50m landmark for paid subscribers.
It reached the 40m mark last September, and this was at 30m six months previous, meaning it’s growing at 20m every year.
The 30m subscriber figure was nowhere near enough to turn those red digits black at the company, with an 80pc rise in revenues during 2015 (to €2bn) resulting in a €173m loss.
However, adding 66pc more subscribers since then could well change this.
Last month, it emerged that Daniel Ek, the company’s chairman and CEO, was recognised by Billboard as the entire music industry’s most powerful person.
Noting the signs of growth in the music industry (not seen since Napster initiated the copyright-ignoring download craze of the early 2000s), Ek’s management of Spotify is described as a key reason behind the return to the good times.
“Against heavy odds, in 2011, the young, tech-savvy Swede convinced the major labels to invest in and support an on-demand subscription model that included a controversial free tier, arguing that it would curb piracy,” said Billboard.