Sad news for online music streamers across the globe.
It may not have the success of Apple or Spotify but we will definitely miss it if it folds. One of the internet’s favourite music streaming service, SoundCloud, might just be closing down as the company’s loses of 2015 have exceeded their revenue. According to UK-based ‘Companies House’, SoundCloud’s revenue grew by 21.6% by jumping up to around 21.1 million euros (around 22m dollars in 2015). However, this profit was overshadowed by the huge defeat the company took when it’s losses accelerated by a staggering 30.9% with a figure of around 51.2 Million euros (around 54 Million dollars).
Inspite of this, the place is not stagnating yet and is still considered a good place to work; but the rising cost of paying royalties and keeping up with a growing user base has taken a toll on the company’s profits. In 2015, the employees working at SoundCloud increased by 25% with the number of hired people going from 236 to 295 people. As a result, the company ended up spending around 26.77 million euros (around 28 Million Dollars) on wages and salaries alone!
In a director’s report, SoundCloud co-founder Alex Ljung wrote, “The directors believe that the Group will have sufficient funds to continue to meet its liabilities through 31 December 2017, the risks and uncertainties may cause the company to run out of cash earlier than that date.”
In an attempt to raise the revenue of the company, SoundCloud launched an ad-free subscription service midway through 2016 called – SoundCloud Go. The impact of this service, which cost 9.99 Dollars, has not been revealed yet.
This news of the company’s losses serve as an apt reason for why the company’s asking price for an acquisition went down from 1 billion to 500 million dollars.
Here’s hoping the company doesn’t run out of money by the end of the year..