SoundCloud Reports $56.5M Loss, Faces “Material Uncertainties”
This is the year that SoundCloud has promised to launch a paid music service and start paying more to the artists that create the music that draw millions of listeners to the service. But first it has to survive growing multi-million dollar losses.
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SoundCloud lost $56.5 million in 2014 according to new UK filings. The loss almost equals the $60 million in investments the music service raised that year. Revenue was $25 million in 2014.
“Our overhead base has increased faster than our revenues,” admits SoundCloud in the filing first reported by Music Ally. “After making inquiries, the Directors have concluded that they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the forseeable future,” the filing continues “However, the Directors have concluded that there are material uncertainties facing the business.”
SoundCloud raised another $35 million earlier this year, but expects to operate in the red for at least 3 more years. SoundCloud was launched in 2008 by Alexander Ljung and Eric Wahlforss,
SoundCloud recently completed deals with two of the three label groups and many indie labels, which likely adds to its future financial obligations. “The Group’s business plan shows that further capital investment will be required in the next 12 months to fund the business," the report concluded.
i was one of the original subscribers. i was also a huge proponent of soundcloud for the first few years. now, i am off SC, and wont use it anymore. they are not the same company they wanted to be, and now they seek to be a sort of spotify, but they arent. the riaa and others have put their foot on the throat of SC, and SC cant play their game anymore. the only asset SC will have in bankruptcy court is their proprietary html5 player. that is what is good about them. i hope google snaps them up, and creates a true youtube like, for music and audio. google can fight back against the powers.
oops! back to MySpace!
well said raz neal 🙂 Shame, they could have been a contender, instead of cozying up to record companies to help them spam us with their ‘mass appeal’ music they could have provided a reliable platform for independent artists (who are now the bigger market) to stream music at a price of their own choosing, then take a percentage as well as concentrating on their music file curating skills, which they seem to have forgotten about – instead trying to make advertising dollars from the majors, who don’t have the money they did now anyway. Only one way you can go from there, and it’s not up.