SoundCloud lost more than $70M over the course of two years

Posted by on February 12, 2016

soundcloudOnline streaming is still a fairly new business and many of the services offered nowadays are still trying to figure out how it works or how to make it profitable. Giants like Spotify or Apple Music are doing fairly well, but others like SoundCloud aren’t doing as great as his competitors and have been actually running their business in the negatives for a few years.

A financial report from the company indicates that  has nearly doubled its losses from 2013 to 2014—those two years combined account for a total of €62.1 million ($70.3 million) in losses. Billboard reported last month about the company getting a credit for $32M saying that the deal was “”an attractive option for companies like SoundCloud that have a solid credit rating, and offers an appropriate funding option for a company at our growth stage.”

The growth stage they refer includes the increase in personnel, making the headcount grow by 21% to 236 people in 2014 and adding its total expenditure on wages & salaries to $20.2M on its own. Spokeswoman Brielle Villablanca released the following statement regarding their strategy to remain afloat:

“Over the past year, we’ve continued to bring partners from the music industry onto SoundCloud,”

“We’ve signed deals with PRS and UMG/UMPG, to add to the nearly 200 deals we’ve already signed, including those with Warner Music, Merlin and NMPA, as well as MCNs and independent creators,” she said. “We’re focussing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.”

The fact that the company has stayed in business for this long is a wonder on its own but their model seems to be going to what their peers did a few years ago, except that they can be too late to join the game and have a share of the pie. With those numbers in mind, the company must be taking whatever option they see feasible before deciding to go down. As you’ve noticed from Metal Insider and many other sites, Soundcloud is still used by many, but unless they launch a subscription service as well (which could also fail, of course), they’ve got some work ahead of them if they want to survive.



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