It’s no secret that streaming giant SoundCloud has been struggling to meet its financial goals for a few years now, despite its enormous popularity with aspiring artists and A&Rs. SoundCloud Go, the platform’s paid option, hasn’t been purchased to the same extent as comparable memberships such as Spotify Premium, making the operating costs almost insurmountable. It’s possible that these lower conversion rates from free to paid memberships are due to the demographic to which SoundCloud caters: namely young people, and up-and-coming rappers and DJs who perhaps are attracted to the platform simply because of its low user cost. Regardless, whispers in the music community about SoundCloud’s woes and potential impending dissolution are nothing new. However, last week, SoundCloud reported that for the first time, it had surpassed $200m in gross annual revenue. This is a huge step and impressive milestone for a company that seems to be turning itself around and adapting quickly to a rapidly transforming music business landscape. Although SoundCloud has proven more difficult to monetize than other streaming options, the increased adspace and promotion of the Go membership have helped to reduce overhead in the past two years. Whether it’s due to the friendliness of the interface, the highly interactionary nature of the community, or the organic grassroots algorithms that help small town performers like Lil Xan grow to fandoms of millions, it seems that SoundCloud is here for the long haul.
Read the report here: Music Business Worldwide