Popular audio streaming service SoundCloud is in serious trouble. Last week it laid off 173 workers (about 40 percent of its workforce) and announced it will close its offices in San Francisco and London. However, that may only be the beginning.
Security Enters Boardroom During Angry Staff Meeting
Rattled employees demanded a meeting to hear why the cuts were made without warning. They also wanted some kind of assurance the company could continue in the longer term.
However the situation appears more dire and management could give no such guarantees. Speaking to employees via video link from SoundCloud headquarters in Berlin, founders Alex Ljung and Eric Wahlforss said even the layoffs would only keep the company going another couple of months.
The company also has an office in New York City.
Staff mood in the meeting was reportedly quite negative. TechCrunch described a startling scene where security staff moved to the boardroom where the staff held the teleconference. Even remaining staff said morale is “pretty shitty … really low,” and some are already quitting.
It’s Not Looking Good for SoundCloud
Though SoundCloud said it’s still looking for more investment, poor outlook and a talent exodus will likely put the company in a death spiral.
SoundCloud, like other popular social and user-generated content platforms, has struggled to monetize its business. While it does offer pro-level services to creators for $7 a month, most find the free service adequate and listeners pay nothing.
The service also features pre-roll and display ads on some content, and lets commercial creators sponsor content. However companies like Sony Music Entertainment have complained the revenue it received was inadequate and left the platform in 2015.
In its lifespan, SoundCloud has raised about $193 million USD from VCs and the entertainment industry.
The company launched in 2008 and is one of the world’s most popular for hosting and consuming audio content. It’s equally popular with independent musicians and podcast makers, including some of the best-known Bitcoin and cryptocurrency shows like Let’s Talk Bitcoin and Bitcoin Uncensored.
Its popularity is largely due to its simple interface, mobile apps and APIs — and, let’s be honest — its generous conditions. It’s possible to host and publish a large amount of audio material without paying at all.
SoundCloud has also had its problems with copyright, after users continually posted copyrighted material on the platform. The issues remain unresolved. This may have affected acquisition deals with Twitter and Spotify, which have both expressed an interest in the past.
Loss Would Be a Big Blow to Creators and Listeners
Losing the company would be a big blow to independent audio creators. SoundCloud has close to 200 million unique monthly listeners. As of 2014, content creators were uploading 12 hours of audio every minute.
On the other hand, it may force those creators to realize well-built hosting and distribution services have a price — one they’ll likely have to help pay if they want to continue.
Are you a SoundCloud fan? What will you do if it folds? Let us know.
Images via TechCrunch, SoundCloud