Spotify’s Shopping Spree Continues — This Time, It’s a SoundBetter Acquisition

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Buying SoundBetter’s the easy part. Now, Spotify’s gotta figure out what to do with it.

And Spotify’s latest acquisition?

That would be SoundBetter, an audio production professional marketplace that’s been quietly facilitating collaborations since 2012.  SoundBetter says they currently have a community of roughly 18,000 musicians, audio professionals, and content creators, with ‘tens of thousands’ of projects facilitated through its platform.

It’s the well-worn internet marketplace idea with a musical twist — and apparently, great execution.  But exactly why Spotify, a streaming music company, wants to acquire a company like SoundBetter is initially unclear.

At the onset, Spotify seems intent on rounding out its artist services, with Spotify for Artists the focal point.

That shifts the focus from ingesting and curating millions of songs to helping to facilitate the creation of music.  Underneath that, there’s also the opportunity to shift from IP created by others (like major labels) to IP created through Spotify, which means lower royalty rates.  That has been a major motivation behind Spotify’s land-grab of podcasting platforms and content.

“As we build out our tools for creators, we want to give them the resources they need to thrive,” relayed Beckwith Kloss, VP Product, Creator at Spotify.  “SoundBetter has the same vision.  We’re excited that creators can generate income through SoundBetter, as well as benefit from its network of top professionals – from instrumentalists to songwriters to producers – as they perfect their tracks.”

SoundBetter co-founder and CEO Shachar Gilad says his company is now spread across 14,000 cities and 176 countries. He declared SoundBetter “the most comprehensive global marketplace for music and audio production professionals for hire in the world,” with Spotify obviously agreeing. Indeed, Spotify desperately needs to establish its global footprint, with incumbents like Apple, Amazon and Google already enjoying broad worldwide infrastructure.

SoundBetter sounds like a rich community, though it’s still unclear how Spotify plans to integrate SoundBetter into its broader business model.  The quick version is that Spotify will better engage musicians and professionals, while drawing them closer to the Spotify platform.  That means creating music in partnership with Spotify, making it a more important streaming platform for creators.

That sounds similar to the intent behind Spotify’s recent investment in Distrokid.

The ultra-successful Distrokid, helmed by Philip Kaplan, has been rattling the cage of more established distributors like CD Baby (now owned by Downtown Music Publishing) and TuneCore for years.  But Spotify killed its ambitious distribution plans after only a few months, suggesting a struggle at Spotify to expand its core business model.

Sadly for Spotify, the core model of music streaming isn’t cutting it financially — and Spotify can’t make its platform a loss leader like Apple, Amazon, and Google.

Interestingly, Digital Music News first mentioned SoundBetter back in 2014, and we’ve been fielding a few inquiries about the company since that point.  But we didn’t quite expect Spotify to swoop in — though given the company’s expansive forays into areas like podcasting and distribution, perhaps anything that can expand the company’s core model is game.