You might be surprised to hear this: SoundCloud spent more money than they earned in 2013. In recent filings in the UK, the music streaming giant disclosed their annual report which details revenue of over $14M last year, up 40% from the previous year’s $10M. However, despite this increase, the company’s operating costs nearly doubled (from over $15M to $29M), resulting in a net loss of $15M.
SoundCloud explained the exorbitant expenses: “We are in a phase of growing SoundCloud into the market-leading platform for listening to, creating and sharing sound. This has necessitated investment in technology, headcount and marketing. Our overhead base has increased faster than our revenues.”
However, most SoundCloud users will know that the service has had a particularly bad year; rapid and unintuitive UI changes and frequent site-wide downtime are just a couple of the major issues that plague the site and outrage both consumers and creators, not to mention the introduction of audio ads that turned previously uninterrupted music streaming into a money machine. And on top of it all, artists themselves are finding themselves shunned out of what was once a home for their music: Kaskade’s own music was removed, Deadmau5 has moved on, and plenty of up-and-coming artists have been locked out due to “copyright infringements”.
What do you think? Is the site we all know and love biting off a bit more than it can chew?