SoundCloud Loses Money Faster as it Grows, Posts $29 Million Loss in 2013

SoundCloud seems to be burning through cash faster than it can earn these days, posting a $29 million loss for the year 2013. This is quite surprising given that it has a massive user base of over 175 million people a month and has quickly established itself as one of the most popular music streaming services on the web. In fact, SoundCloud topped our poll results from earlier this week, appearing to be the most used streaming service among HYPETRAK readers.

In a statement a spokesperson said that “growing SoundCloud into the market-leading platform for listening to, creating and sharing sound has necessitated investment in technology, headcount and marketing. Our overhead base has increased faster than our revenues.”

In addition to having costs exceed revenues, SoundCloud faces issues with record labels that are unsatisfied with its terms, copyright violations, and lack of royalties on streams from user-uploaded content. The company recently put together the OnSoundCloud program hoping to generate more ad revenues to satisfy labels, but it looks like it hasn’t fulfilled its purpose given that negotiations for the program have been put on freeze.

If SoundCloud can navigate through these problems and emerge victorious, there is no doubt that it will be on track to an incredibly successful exit.

Words by Arjun Mehta