Pressure from the big four record labels appears to be putting SoundCloud up against a wall. New data from the company’s recent UK filings has emerged which indicates that the company’s losses almost increased by 100% from 2013-2014 – after having already doubled in 2013 from the year prior.
According to filings with Company Housel which were first picked up by Music Ally, SoundCloud’s 2014 losses totalled $56.5 million. The company reported losses of $29.2 million in 2013 and $15.7 million in 2012, suggesting a significant trend of financial insolvency for the streaming service.
To be fair, Soundcloud’s revenues also grew from $14.1 million to $25 million from 2013-2014 (77%), which made for a wider margin of growth than the revenue increase from $10 million to 14.1 million between 2012-2013 (40%) – but what revenues the company reported in 2014 are still outweighed by its losses to a more than two-to-one ratio. To put it in perspective, cash flows out of the company almost equaled the $60 million of investment capital raised to keep it afloat the same year.
A note in the filings reads:
After making enquiries, the Directors have concluded that they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the forseeable future. However, the Directors have concluded that there are material uncertainties facing the business.
Upon signing a licensing agreement with Universal Music Group, SoundCloud rolled out two new features intended to offset its losses by re-engaging its user base – but until more recent data comes to light, it will be difficult to ascertain what sort of impact such developments might have on the streaming service’s bottom line.