Is SoundCloud on the verge of going under?

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Is SoundCloud on the verge of going under?

For anyone who keeps an eye on the music industry, you would have noticed that SoundCloud has been in and out of news headlines for the past 2-years and it’s usually not for the best reasons.

The German company has been the forefront of music streaming for several years now, offering a platform to amateur musicians to share their music, connect with likeminded artists and often build a career.

The platform has spawned the careers of literally thousands of artists – we couldn’t possibly go into that in detail – but with the latest news concerning SoundCloud we have to ask the question, is it coming to an end?

Lets get you up to date first: Late last week SoundCloud stripped it’s workforce by 40%. A total 173 employees were let go, along with entire office locations including London. Doesn’t sound good, does it?

This unsettling move  certainly raised a lot of questions, particularly on the future of the streaming service, however SoundCloud co-founder Alex Ljung has spoken on the move, claiming this is all part of SC’s plan in “taking back control”.

Alex Ljung at Tech Open Air Berlin. image via Tech Crunch

During his interview at Tech Open Air Berlin, Ljung said: “We had to lay off 173 people from our team, or 40 percent of SoundCloud. All of them are incredible people. It’s incredibly sad. But we’re very focused on doing what we can to support them”.

“We saw the amount of support (for these people) from the SC community. They produced a google doc themselves, which SC is also supporting. I wasn’t concerned the news (about the layoffs) leaked, because at that moment I had to deal with telling the company, which was more important.”

As mentioned above, SoundCloud has been in the wars of late. Despite a 21.6 percent rise in revenue in 2015, the company’s operating losses opened up 25 percent to a whopping €48.6 million, and their net losses jumped 30.9 percent to a simply staggering €51.2 million.

But in response to these heavy numbers, Ljung says “we’re one of the largest music platforms in the world. Even just yesterday we were in the top 20 of all the apps downloaded in the app store. So we still have an enormous user base and growth and engagement. So the platform is still growing. Creators are huge on the platform. The numbers of tracks are still growing. So everything in terms of the business is doing well.”

Ljung also credits SoundCloud’s relationship with it’s users as another saving grace, saying “We are incredibly strong with creators, that will continue to be a focus.”

“We’re are also one of the largest listener platforms. Revenue is growing fast. For the future we’re going be doing less things that other people are doing and more things which will be completely unique to SoundCloud.”

He says “We’re finally at a point where music industry streaming revenue is growing rapidly. Outside of that we still have a world where MOST people are NOT streaming music. But streaming is here to stay. Most people will now move to streaming over the next 10 years.”

“As the companies are competing, a lot of the users are using all these platforms but they are ALSO using SoundCloud as well because they can get something there they can’t get anywhere else. Plus you can interact directly with the artists.”

So it seems a plan is definitely on hand and underway, however the big question mark above SoundCloud is still there, and after speaking directly with several artists in the process of building a career with SoundCloud, there are some big concerns moving forward.

Time will tell, I guess. What do you think will happen? Will SoundCloud survive this rough patch?

Read the full interview from Tech Open Air Berlin via Tech Crunch here.

(Source: Tech Crunch)



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