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Spotify News Round-Up: Japan Launch, Reportedly Acquiring SoundCloud

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In a blog post, popular music streaming platform Spotify announced at a press event in Tokyo that it has launched its services in Japan, albeit on an invite-only basis.

In Japan, Spotify will be the first music streaming service to offer a free, ad-supported music service, as well as its ad-free, subscription service. Spotify Premium will be available to users for only 980 yen (or $9.60) a month.

“We’re incredibly excited to launch Spotify with a uniquely Japanese music experience,” says Spotify’s CEO and Founder, Daniel Ek. “With Spotify’s revolutionary discovery and personalization features that fit your every mood, we aim to help people enjoy more music and connect more artists with fans than ever before.”

But reaching new customers in Japan may prove to be difficult for Spotify, as Japanese consumers still prefer to purchase music physically—think CDs and records—rather than digitally, according to TechCrunch. However, its free-tier option will likely work in its favor. It is the only mainstream music streaming service in Japan that offers this option, allowing consumers to try out Spotify, see if they even like it, before shelling out a monthly subscription fee.

Spotify is now available in 60 markets worldwide, with over 100 million users. Its push into Japan follows Spotify’s expansion into Indonesia back in March. The company first entered Asia in 2013, launching in Hong Kong, Malaysia, and Singapore.  

SoundCloud Acquisition

On Wednesday, the Financial Times reported that Spotify is in talks to acquire SoundCloud, a platform that allows artists to upload their music and share it with fans on blogs and across social media.

German-based SoundCloud has over 125 million songs—it also launched its own paid service earlier this year—and if the deal goes through, Spotify would eliminate a strong player in the music streaming industry.

As Spotify eyes an IPO next year, SoundCloud and its investors stand to benefit; Twitter Inc. is a notable investor, having put $70 million into the company this past June. SoundCloud’s valuation stands at about $700 million, the same value it saw in 2014.

Spotify’s current valuation is roughly $8.5 billion, and the company just reached 40 million paying subscribers, still well above Apple (AAPL - Free Report) Music’s 17 million paying subscribers.

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