Some people might be surprised to learn that Soundcloud is still borrowing money in order to stay afloat – those same people might be surprised to learn that even some of the biggest companies have never made a profit, and it’s not that uncommon.

But Soundcloud is in actual trouble this year as its available funds are running “dangerously low,” an insider told Digital Music News. Soundcloud recently received over $120 million in funding, bringing its total valuation to over $700 million, but a source says that the streaming service is “at risk of exhausting readily-available funds and will likely require an ’emergency bridge,’ either from existing investors like Union Square Ventures, or alternatively, a bank, by the end of this year.”

As per usual, it seems the major labels are to blame. Soundcloud has already been revealed to be in licensing deals with the three majors, but investors are holding back on injecting funds to see how the deals turn out. And “UMG and Sony are also threatening to sue SoundCloud if talks don’t progress at a faster pace,” making the process even more stressful for Soundcloud.

At the same time, Soundcloud’s plans for a paid subscription service are finally coming to a head. According to Resident Advisor, “the first tier would allow listeners to explore SoundCloud ad-free and download a limited number of files, while the second tier would provide unfettered access to the entire catalogue.” While no figures or prices have been revealed as of yet, it’s rumored that the subscription will follow the popular $10/mo platform.

This is not the Soundcloud we first came to love. There have been many changes over the past year alone, and there will likely be many more. But it stands that Soundcloud is still the premiere streaming service for dance music (and other odder things), and until something better pops up, we just have to hope for the best.


H/T Digital Music News & Resident Advisor