SoundCloud’s Outlook after Losing $70M

by San Antonio Attorney

SoundCloud recently reported that they have a total of $70 million in losses for the past two years and have only yielded $16.8 million in profits.

The Berlin-based audio streaming company lets consumers upload audio content and share it with other users.  The music playlist can also be shared through other social media networks.  It has garnered a huge user base of 200 million worldwide.  A lot of investors have expressed their interest in getting involved but profit translation was scarce.

Introduction of advertisements just like the Youtube was the only option Soundcloud had to fix their financial problems in 2014.  The advertisements increased the bottom line just marginally.  Billboard elucidated that SoundCloud is making rational investments to save the company from sinking, as manifested by the $77 million worth of investment funds last year.

This payment program is a common business model in the digital music industry, just like what Twitter did.

SoundCloud has finally decided that it will operate even with financial restraints, hoping to find their big break.  Warner Music Group is in the talks with SoundCloud for a potential license deal that can rake in huge financial gain.

The Universal Music Group recently struck a deal with the company.  Another benefit to SoundCloud is the recently registration of more than 20,000 independent artists through the global rights agency for independent labels called Merlin.

SoundCloud has also aimed to add a paid subscription service to their account similar to their major competitors such as Spotify and Pandora.  Radio Streaming will soon be included in their new format, as announced through their Facebook page.

However, Sony has already pulled out their artists such as Kelly Clarkson, Hozier and Adele due to lesser pay.

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