Twitter Discussing Music Deals With Startups

Twitter Inc. (TWTR) is in early-stage discussions to acquire or partner with music-related startups, according to people with knowledge of the talks, as the company works on ways to rev up user growth.

One of the companies Twitter was considering buying is SoundCloud Ltd., a Berlin-based startup that lets people share music, according to one of the people, who asked not to be identified because the information is private. The talks have since ended, the person said today. Twitter’s business development team has also been discussing partnerships with companies including SoundHound Inc., a Santa Clara, California-based application for recognizing music that is playing at the moment.

Twitter, which people use as a forum to talk about live events and entertainment programming, is holding talks with music-related companies as it works to attract a broader audience. The San Francisco-based microblogging company has struggled to woo new users to its service as quickly as it once did. Membership in the first quarter stood at 255 million, up 25 percent from a year earlier and down from 30 percent growth in the prior period.

Will Stickney, a spokesman for Twitter, declined to comment yesterday. Kristina Weise, a spokeswoman for SoundCloud, didn’t return a call for comment.

Photographer: Aidan Crawley/Bloomberg

Eric Wahlforss, founder and chief technology officer of SoundCloud Ltd., at the Dublin Web Summit on Oct. 30, 2013. Close

Eric Wahlforss, founder and chief technology officer of SoundCloud Ltd., at the Dublin... Read More

Close
Open
Photographer: Aidan Crawley/Bloomberg

Eric Wahlforss, founder and chief technology officer of SoundCloud Ltd., at the Dublin Web Summit on Oct. 30, 2013.

Twitter’s discussions with SoundCloud were reported yesterday by technology blog Re/code. Der Spiegel reported earlier today that the talks had ended.

Music Boost

Other consumer technology companies have built themselves up atop the music industry, including Apple Inc., which embarked on a growth streak last decade that was fueled by its iTunes music store and iPod device. More recently, Apple has been in discussions to acquire Beats Electronics LLC, a music-streaming service and headphone maker, for $3.2 billion. Facebook Inc. has integrated Spotify Ltd.’s music-streaming service into its social network to boost sharing, while Google Inc.’s YouTube video site has helped turn musical nobodies into stars.

Twitter previously tried to build an app, called Twitter Music, to help people find songs based on the buzz on the platform. The app was shut down earlier this year after flopping with consumers.

Since then, Twitter has been signing partnerships that get it closer to the music industry, including a deal with Billboard earlier this year to display charts on the most talked-about songs. The company has also helped train celebrities in best practices on the network, with singer Justin Bieber one of its most-followed users.

SoundHound, Shazam

SoundHound has attracted more than 200 million users to its mobile app that recognizes songs and lets consumers search for and buy music based on what they’re hearing. The company makes money through affiliate fees with companies including Apple and Amazon.com Inc., mobile advertising and technology licensing.

Twitter has held talks with SoundHound about using its technology and data to boost user engagement, said Katie McMahon, vice president of sales and marketing at the startup.

“As a leader in mobile, we’re viewed as a very interesting source that can show insights into what may be happening,” McMahon said. SoundHound is “monetizing its user experience in a way that keeps users engaged.”

As part of the effort to add to its entertainment offerings, Twitter has also had informal talks with Shazam Entertainment Ltd., the London-based audio-recognition service, about ways the two companies could work together around television viewing, said a person with knowledge of the matter.

Sarah Hudson, a spokeswoman for Shazam, declined to comment.

250 Million

SoundCloud lets people record, upload and share audio they create and has become popular for listening to DJ sets and mixes from electronic artists. The company charges for premium subscriptions and has more than 250 million listeners, Chief Executive Officer Alex Ljung said at the TechCrunch Disrupt conference in October. SoundCloud is backed by venture capital firms including Institutional Venture Partners and Kleiner Perkins Caufield & Byers.

To contact the reporters on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.