SoundCloud: Profitability Will Take Years
Streaming music is succeeding as top services Amazon Music, Apple Music and Spotify are adding millions of paid subscribers, but the struggle to get into the black and see profit is crucial, especially for the long-term survival of streaming service SoundCloud.
An online platform that has helped new stars such as Chance The Rapper and Kygo rise to international prominence, SoundCloud is beloved but love won't pay the bills. Investors came to its rescue in August to save the nearly shuttered service but SoundCloud's millions of free users have diminished somewhat and the two tiers of SoundCloud Go premium have not reached the point where it's profitable.
Digital Music News uncovered a German regulatory filing spelling out the tough realities for SoundCloud moving forward. Converting free users to paid subscribers is SoundCloud's road to survival. Depending on the rate of that growth, fresh investment could be needed "to generate sufficient cash to cover the planned expenditures."
Given the power and scope of the big-league majors, additional music subscriptions are most likely to be a second thought. But fans need to wrap their heads around supporting multiple premium services for many of their favorites to survive long-term.