According to new financial reports the popular music sharing service SoundCloud may be close to bankruptcy. There are talks of selling the business – which has helped support independent musicians for years – to a group of buyers.
According to the reports, SoundCloud lost $52 million in 2015, even though revenue grew by $22 million. As with many tech startups, server and maintenance costs are astronomically high and often companies have no major revenue streams.
SoundCloud does have a revenue stream – it’s premium subscriptions – but it may not be popular enough because the company is now offering 3 months of SoundCloud Go+ for only $1. The service’s regular price is $9.99 per month. The move may be an effort to emulate many in the tech world, offering free or discounted/subsidized premium service to entice free users to switch.
Will it work? The world will have to wait and see. You can take advantage of the $1 offer here.
Despite mega losses and the potential that users just don’t want/need their premium service, several major players have shown interest in buying the company. Google has shown interest in buying the service, as have both Spotify and Twitter. Google is eyeing a sales number around $500 million – half of SoundClouds $1 billion ask. Spotify and Twitter turned away from the idea before making an offer.