Where there is smoke there is fire.
The problem isn't the user base, a user base just costs money. Soundcloud has a huge problem with their business model.. it'll cost an insane amount of server space and bandwidth to accommodate all the trash that gets uploaded daily... most of which will hardly get any play and just has to sit there until the user decides to delete it. Then on the tracks that do get a lot of traffic, how do they make money from that? Probably only from the fee that user pays for their premium account. And maybe the couple of people that pay for their streaming service which looks increasingly out of date with it's low quality streams. Plus there just aren't that many people that are willing to pay for the kind of content soundcloud offers, as it's presumably a music discovery service... something they've never really made a push for by offering things like promotion services, more ways to interact with your followers and build a community around the music and soundcloud itself. You can't sell your music on it, or accept donations a la patreon.
No... just like every other unicorn they started with a great free service... that had great potential. But instead of expanding it they gradually limited features, removed them or put them behind pay walls and plans.. Ohh, the premium plan that offers exactly the features I just lost for a fee.. but I get a star behind my name so it's total value for money. They removed Groups, and they were an uncurated mess for sure.. but they should've just gotten some interns to curate it a bit.
The news in that Techcrunch article is actually very bad!
SoundCloud laid off 40 percent of its staff last month[FONT="], with 173 employees departing in an effort to cut costs. The company only had enough runway left to last into Q4, and today’s investor decision was viewed as a do-or-die moment for the company. [/FONT]
So.. we are not making any money but we have over 400 people employed?
[FONT="]SoundCloud declined to share the valuation or quantity of the new funding round. [/FONT]
So.. we are not very proud of the result, are we?? Normally you boast about this.. if all is well.
[FONT="]Yesterday, [/FONT]Axios[FONT="] reported the company was raising $169.5 million at a $150 million pre-money valuation. [/FONT]That’s a steep decline[FONT="] in value from the $700 million it was valued at in previous funding rounds[/FONT]
Ah, here the monkey comes out of the sleeve as they say in Holland. That is a very steep decline.
[FONT="] The new Series F round supposedly gives Raine and Temasek liquidation preferences that override all previous investors, and the Series E investors are getting their preferences reduced by 40 percent. They’re surely happy about that, but it’s better than their investment vaporizing.[/FONT]
And here the monkey runs around the room shitting all over the furniture.
What this means is that those Raine and Temasek people said: "okay, here is one last bag of money.. in return we own your ass. If you don't show us black numbers by <insert date> we'll declare you bankrupt and get out money out first... all of it (the 170 million and then some). The older investors can now be happy if they get some scraps.
[FONT="]While abdicating the CEO role probably wasn’t exactly what Ljung had hoped for, at least he gets to stay on with the company as chairman of the board. “This financing means SoundCloud remains strong, independent and here to stay,” he wrote.[/FONT]
It also means he's out on his ass but is allowed a gracious exit so as not to antagonize the older investors (who've seen their share reduced) or employees (who've seen their friends fired)
[FONT="]SoundCloud says its total revenue is now at a $100 million annual run-rate. If it can keep costs low and grow that number, it may eventually get to break even and no longer need infusions of investor capital.[/FONT]
uhuh.. how the fuck are they gonna do that without making additional costs, with 60 people now doing the work of 100 and a new CEO and board members?
[FONT="]Employees told TechCrunch that the company was “a shitshow” with inconsistent product direction and dwindling cash. Ljung was seen as reluctant to be honest with the team, and unfocused as he partied around the world like a rock star.[/FONT]
haha.
Bit of background on the new CEO:
Kerry Trainor Steps Down as Vimeo CEO | Variety
Before joining Vimeo in March 2012, Trainor was senior VP and GM of entertainment for AOL’s Huffington Post Media Group, overseeing properties including AOL Music, AOL TV and Moviefone. Before that he was co-founder and CEO of FlipGloss Media, a photo-distribution startup acquired by Forbes Media, and was head of global media products for Yahoo Music. Trainor ran business development and product management for music startup Launch.com, which was acquired by Yahoo in 2001.
That's an impressive list of companies that got either liquidated or 'acquired'....
If you have a lot of stuff parked on Soundcloud.. better start making backups.
In good news though... looks like some ex-employees are already back up and running!!
Listen to DJ Sets, Mixes, Tracks and Sounds | hearthis.at
Same service, better features, more uploads, no bots, better streams, better premium features. I'm leaving my soundcloud open, but I'm moving here.