Everything’s great with SoundCloud, says SoundCloud
By Chris Cooke | Published on Friday 6 January 2017
SoundCloud would like you all to know that everything is going great. I mean, really great. Great’s the word everybody. No need to make SoundCloud great again, it’s already great. Which is great, isn’t it? It’s great that everything’s great.
The streaming firm issued a statement yesterday amidst chatter about its most recent Companies House filing in the UK, which became publicly accessible this week. The filing, which was the company’s 2015 accounts, basically confirmed what we already knew, that SoundCloud was still haemorrhaging cash as it desperately tried to get its new ad and subscription revenue streams off the ground. Losses increased 31% to $52 million that year even though revenues were up 21.6% to $22 million.
Beyond the figures there was a statement from co-founder Alexander Ljung that admitted the company’s future was now reliant on a successful move into subscription streaming. “The assumption of a successful launch of the new subscription service is the key element of financial projections for the next three years”, he stated.
Conceding that the launch of the subscription service was a considerable financial burden, Ljung went on: “Whilst the directors believe that the Group will have sufficient funds to continue to meet its liabilities through 31 Dec 2017, the risks and uncertainties may cause the company to run out of cash earlier than that date, and would require the Group to raise additional funds which are not currently planned. These matters give rise to a material uncertainty about the Group’s ability to continue as a going concern”.
Which is all a bit doom and gloom, isn’t it? Though not surprising. It’s no secret that SoundCloud – despite its enduring popularity amongst early adopters and opinion formers in the music community – has been residing in Brinksville for some time. Largely due to it having decided that subscription streaming, rather than charging hosting and streaming fees to content creators, was its future somewhat late in the day.
Significant developments were made last year in getting the music industry on board for SoundCloud’s ad platform and subscription service, which are now rolling out around the world. Though, while subscription streaming may be a more solid business for SoundCloud long-term, it’s also a business from which no one has, as yet, turned a profit, and it puts SoundCloud up against much better funded rivals like Spotify, Apple and Amazon.
Which is why SoundCloud arguably needs to be bought by someone whose coat is mainly notable for the size of its pockets. Talks with Spotify, which could use the SoundCloud platform to upsell its own subscription package, fell through last year. Though sale negotiations are now rumoured to be progressing well with Google.
Whatever, everything’s going great remember. GREAT! “SoundCloud filed its 2015 accounts with Companies House in December, and they are now publicly available on their site as of today”, the firm said yesterday, in response to chatter about its filing
“The accounts show that, in 2015, we were heavily focused on putting the necessary measures in place to build out our monetisation 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”.
Let’s not forget all the greatness though. “In 2016, we saw solid growth not only for the industry but for SoundCloud too”, the statement goes on. “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”, the firm concluded. “While also building a financially sustainable platform where our connected community of creators, listeners and curators can continue to thrive”.
Good times. Can we just get SoundCloud merged with YouTube, then at least the music industry can combine all its moaning about user-upload platforms and safe harbours into one pot, and at least that’ll be more efficient for everybody. Oh, except everyone’s agreed to put Facebook at the top of that particular moan list in 2017, haven’t they?