Earlier this week, SoundCloud in their financial statements showcased a loss of $44 million in 2014. Quoting Music Business Worldwide “SoundCloud losses show a broken business model in desperate need of a fix.” Emerging reports from trustworthy entities like FactMag, wrote, “SoundCloud could be forced to close after $44m losses.”
Further financial statements below go on to indicate their administrative expenses (staff and other business basics), which grew 67.8% to €47.74m in the year. Sustaining these losses, their headcount grew by 21% to 236 people in 2014, levelling up total expenditure on wages & salaries jumped 42.5% to €17.9m.
As a result, its average annual wage per employee dropped slightly from €83,830 to€79,980 – still a very high figure compared to certain prominent rights holders in the music business.
Based on these reports, Dancing Astronaut reached out to the company spokesperson.
“Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.”
Considering they have been on an uphill battle field against major labels over the past few years, and finally being able to secure deals deals with PRS for Music, Universal Music, Warner Music and more. It’s the kind of reassuring response you’d expect from an official statement. SoundCloud needs to build a sustainable business model. However, the latter end of their response does seem reassuring.
“We’re focusing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.”
Read their full statement below:
SoundCloud filed its 2014 accounts with Companies House. Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.
Since we began, we’ve been building a completely unique platform. SoundCloud users can discover more creators, at all stages of their careers, than anywhere else, and more music and audio: over 18 million creators are using the platform, sharing well over 110 million tracks, and reaching 175 million monthly active listeners. Additionally, comScore recently listed SoundCloud as being the 8th most popular app among millennials based on usage in the US.
Over the past year, we’ve continued to bring partners from the music industry onto SoundCloud. We’ve signed deals with PRS and UMG/UMPG, to add to the nearly 200 deals we’ve already signed, including those with Warner Music, Merlin and NMPA, as well as MCNs and independent creators. We’re focusing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.
Sources : FactMag / Music Business Worldwide / Dancing Astronaut
I’ve been a DJ since 2001, having played at prestigious clubs, festivals and other dance music events, I head the DJ department at Beatworx. I’m a technology enthusiast, and love sharing my knowledge and experiences here.
