Spotify in discussions to buy Soundcloud - reports

Digital music service Spotify is in negotiations to take over German-based rival Soundcloud in its latest move to compete with Apple, according to reports from the Financial Times.

Rising competition in the music streaming industry has curtailed profits for independent start-ups such as the Swedish-owned company and its lossmaking German competitor, as giants like Amazon and Apple launch their own services.

According to the reports, it has not yet been decided how much Spotify will pay for Soundcloud, but previous valuations have put the company at around $700m. The final figure may bge closer to $1bn, should the deal go ahead.

This month Spotify reached 40m subscribers to its service, which was launched in 2008.

Although Soundcloud boasts 200m users, financially it has struggled to gain profits from its free-to-use platform for audio tracks. It reported an operating loss of €39m in 2014.

Sweden-based Spotify is expected to introduce an IPO next year, and this move may be part of its preparations for the flotation.