What happens to SoundCloud?

A large musical platform massively dismisses employees and closes the offices. Volunteers and rapper Chens are trying to help her.

In early July, SoundCloud reduced 40% of employees and closed offices in San Francisco and London. Staying on independence, the authors were not sold to large players in the market and kept afloat thanks to investments. Unlike other similar services like Spotify, SoundCloud formed a large community of novice musicians within itself, who create their own content and freely place it.

About 170 million people use the service, but, despite repeated attempts, the authors could not correctly monetize it. Now the company is close to closing, and this can become a tragedy for the musical industry.

What they love SoundCloud

The authors of the service, sound engineer Alexander Jung and musician Eric Walfors, conceived the project in 2006. They drew attention to an interesting detail: photographers share and discuss their work in the Flickr photo service, the authors of the clips and short films use Vimeo , and the musicians do not have their site.

Of course, many artists used Myspace . However, she was not niche, she did not focus exclusively on the musical community, trying to build an audience. In addition, by 2006, when Facebook was rapidly developing, myspace became increasingly difficult to resist the changes.

On this basis, in 2008, SoundCloud launched - a service with which musicians can publish their compositions, exchange them and share their opinions. Two years later, the application was already considered a high -quality analogue of Myspace, having received $ 2.8 million from the British investment company Dawghty Hanson Technology Ventures from the British investment company.

In 2010, the authors of SoundCloud announced that a million people are using the service monthly. Two years later, this figure increased to an amazing mark of 180 million users per month, and the musical base reached 150 million tracks.

In addition, the service is used by the authors of amateur and professional podcasts . The site has an intuitive interface, it is easy to find music on genres or even podcast of the federal antimonopoly service .

The difference between the service and large players like Spotify or Apple Music is that they are convenient music -listing applications, but SoundCloud stores thousands of gigabytes of free user records. If the service closes, their fate will be in question.

What is his problem

Although the service gained a huge audience that actively uploads the compositions and discusses it, it never brought money. In 2014, his revenue amounted to $ 19.4 million with a clean loss of $ 44. In 2015, the loss amounted to $ 51 million, and revenue - $ 24 million.

In 2016, the authors reported on revenue of $ 28 million, but for the first time did not disclose losses. Even if this is not worth an attempt to hide a critical financial situation, the situation is obvious - the SoundCloud team has not come up with a profitable monetization method.

The company survived for nine years at the expense of large investments. It was supported by various funds, in July 2016, Twitter invested $ 70 million in the service, receiving the share of SoundCloud shares. At the end of 2016 and the beginning of 2017, the purchase of SoundCloud was discussed by the Spotify service, rumors went about the interest of the Apple service. However, not one of the transactions has ended.

The attempts by SoundCloud authors have failed mainly to find new sources of income. In 2016, the service had an updated one (the Service subscription existed before) a monthly subscription worth $ 10. For it, the user gets the opportunity to block advertising and listen to offline music, including 30 million tracks with limited access. In addition, subscribers can load tracks longer than 3 hours.

The management claimed that the subscription would help SoundCloud compete with other musical applications, but the difference between an independent platform and the largest services is too significant. The paid subscription of SoundCloud was issued by only 250 thousand people. Spotify, for comparison , is 50 million subscribers (subscription costs $ 10), Apple has 27 million.

The problem is that the paid subscription to SoundCloud does not offer any unique functions, including for beginner musicians who have enough free version. In addition, the subscription is available only to residents of the USA, Great Britain and Germany. An unsuccessful can be considered a paid streaming service SoundCloud Go, inaccessible in most European countries.

For the past five years, the SoundCloud audience has survived at 175 million people. Competitory applications are attracted by millions of new users annually.

What will happen next

Back in January 2017, the authors of SoundCloud warned that they could soon end with money, but the situation became critical only by summer. The strangest thing in the situation with the dismissal of 173 employees is that a week before the company hired 12 people - this was the largest set over the past few months.

Perhaps the situation with the financial situation is changing so rapidly that it forces the leadership impulsively to change plans. According to TechCrunch, after mass dismissal, the atmosphere in the company fell into decay , and the remaining employees were disappointed in the actions of the management.

The publication believes that SoundCloud has only 80 days of work. This information was refuted by the authors of the service, explaining that the company expects to maintain independence and find new investors. Against the backdrop of the dismissal, a fan of the site rapper Chens (Chance the Rapper) promised to help the service and soon released a song, exclusively available on SoundCloud.

The salvation of music, which can disappear if SoundCloud nevertheless ceases to exist, the digital library Archive.org took up. It will take at least one and a half million dollars to archive all service data, so while the authors retain the most popular tracks. Almost a dozen volunteers are working on the initiative. They urge the Internet community to help the project with money.

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