SoundCloud Streaming Service Reportedly In Financial Trouble
SoundCloud, the popular streaming service used by artists worldwide to share their music with fans, is reportedly in danger of collapsing. According to Music Business Worldwide, SoundCloud lost approximately $62.19 million in 2014 making for a total loss of $119 million in the past three years.
An auditor from KPMG noted that the figures represent “a material uncertainty which may cast significant doubt on the company’s ability to continue”.
The site, which was founded in Sweden in 2007 by Alexander Ljung, has long been an online music community staple, serving as a reliable means for independent artists to share their music, as well as a buzzing hub when it comes to getting your hands on some new tunes.
SoundCloud have commented that their financial reports for 2014 “reflect those of a company in a strong growth stage”, however the losses incurred in 2015 and 2016 could well be enough to sink the streaming platform. FACT Magazine reports that despite the perceived losses, the company has been expanding “at an exponential rate” with an increase in staff numbers of 21%, as well as salaries increasing overall by 42.5%. The fact that the site has yet to roll out a subscription service similar to its peers (Apple Music, Spotify, Tidal et al.) could also be a contributing factor in its downfall.
Read SoundCloud’s comment on their financial situation below:
“SoundCloud filed its 2014 accounts with Companies House. Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.
Since we began, we’ve been building a completely unique platform. SoundCloud users can discover more creators, at all stages of their careers, than anywhere else, and more music and audio: over 18 million creators are using the platform, sharing well over 110 million tracks, and reaching 175 million monthly active listeners. Additionally, comScore recently listed SoundCloud as being the 8th most popular app among millennials based on usage in the US.
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. We’re focusing 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.”