Apple (AAPL), owner of the dominant e-tailer iTunes, and Spotify, the popular European music service, have been in “on-again, off-again discussions about an acquisition,” TechCrunch is reporting, citing an anonymous source. This follows on a failed deal between Luxembourg-based Spotify and Google (GOOG), TechCrunch said.
But Reuters shot down the rumor, offering relief to already beleaguered record industry execs. The news service found a helpful unnamed source “close to Spotify” who put the rumor to rest, saying Spotify was not interested in being bought by anyone, and added that the rumor was “completely untrue.” Apple declined comment, as usual.
The rumor mill is constantly running. But TechCrunch’s Michael Arrington said this rumor from an anonymous source had legs, though noting no firm price has been offered and no term sheet is on the table.
Reuters said the rumored deal made a lot of sense to some in the music industry. Why not combine iTunes, the biggest music e-tailer, with Spotify, a popular—in Europe—streaming service? “Music industry types must have had been reaching for their tranquilizers,” the news service said.
In the interim, Arrington claimed Spotify has been flirting with Apple’s archenemy, Google, considering an arrangement to have its software pre-installed on Android phones, according to the TechCrunch source. Google is alleged to have offered about $1 billion to buy Spotify.
“Ultimately the deal went sideways because Google was demanding that all label deals be grandfathered in,” TechCrunch reported. Meaning, if Spotify was acquired, the deal would have terminated Spotify’s existing deals with record labels and would have required that they be renegotiated.
That would be a huge problem because the record labels are so finicky about their rights. Spotify to date has been unable to scale that hurdle with U.S. labels.
