Music streaming site SoundCloud launched its premium music service, SoundCloud Go, in March of 2016, following sites such as Spotify, Pandora, and Apple Music. While the company has seen revenue grow, the Financial Times warns that the company could run out of cash by the end of the year unless it entices new investors.
The company saw some growth following the launch of SoundCloud Go, but it comes after SoundCloud lost almost $52 million in 2015 according to MusicBusiness Worldwide. In September, word broke that Spotify was in talks to acquire SoundCloud to the tune to $1 billion, but it later backed away, reportedly because it was preparing for an initial public offering (IPO) in 2017. Earlier this week, MusicBusiness Worldwide reported that Google was rumored to be eyeing the company for $500 million — just half of the price that SoundCloud had been looking for.
Fast Company reported that while SoundCloud faces a daunting future, CEO Alex Ljung is hoping that the shift to a premium service will help turn things around, and that the company is looking for a fresh round of investment.
With SoundCloud Go, the company has entered a tough market, where streaming services such as Pandora and Spotify have struggled to remain profitable. Getting additional investment might be the only thing that can help save the company — as Fast Company points out, “not even a massive influx of paying subscribers would necessarily save SoundCloud.”
However, SoundCloud is one of the largest music streaming platforms out there, with a user base of 175 million listeners listening to its huge troves of content. It’s a platform frequently used by new musicians (as well as The Verge), and it remains an excellent place to discover new artists and tracks. Fast Company points out that it also attracts heavyweight artists as well, such as Chance The Rapper and Kanye West.
Update: January 9th, 6:30pm:
A Soundcloud spokesperson issued the following statement:
SoundCloud filed its 2015 accounts with Companies House in December, and they are now publicly available on their site as of Friday. The accounts show that, in 2015, we were heavily focused on putting the necessary measures in place to build out our monetization model, including our consumer subscription service, SoundCloud Go, and roll-out of advertising on the platform. This meant investing in technology, people and marketing, as well as securing complex licensing agreements with key music industry partners. As such, the company remained unprofitable.
In 2016, we saw solid growth not only for the industry but for SoundCloud too. And we see this trend continuing throughout 2017. To date, we have successfully launched SoundCloud Go, our subscription service, and our ads business in eight markets, including the US, UK, Ireland, France, Australia, New Zealand, Canada and Germany. We are on a very positive path to achieving our aim of enabling all creators to be paid for their work, while also building a financially sustainable platform where our connected community of creators, listeners and curators can continue to thrive.