Soundcloud financial report reflects $44 million losses
The Soundcloud financial report reflects $44 million in losses, showing signs that the company may be forced to close down.
Earlier we reported on how Soundcloud’s important deal with Universal Music Group may put the streaming site in the running. However, the figures that the Soundcloud financial report has presented have things looking rather grim for the company.
According to Music Business Worldwide, the Soundcloud financial report for 2014 shows that the company’s overheads have increased faster than its profits giving the impression that Soundcloud is in some big trouble.
In 2014 Soundcloud managed to bring in $17.35 million and it lost a total of $44.19million. The salaries that they paid out during that time also rose by 42.5%; the average salary of each employee cost the company $90.646 per year, that’s about R 1.43 million.
The report also stated that the company had “adequate resources to continue in operational existence for the forseeable future,” and that Soundcloud was counting on “further capital investment” to continue operating for the year of 2015.
The Financial Times reported that, KPMG (Soundcloud auditor) said that the Soundcloud financial report presented “a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.”
During last year, Soundcloud managed to get in $77 million in investment and they reportedly gave Universal Music Group an equity stake in the licensing deal that they closed.
However, if Soundcloud’s subscription service doesn’t see the light then they will be forced to find other ways of bringing in cash in order to continue.
Despite the dismal Soundcloud financial report they have responded with a statement which was published on YourEDM
Soundcloud filed its 2014 accounts with Companies House. Beyond the full-year financials for 2014, which reflect those of a company in a strong growth stage, they show that, in 2015, we secured $77m of incremental capital, some of which came from our existing investors, demonstrating their belief in the future of the company, and the rest of which is a flexible credit line from Tennenbaum Capital Partners, an attractive option for companies like SoundCloud, who have a solid credit rating and are on a clear path to global success.
Since we began, we’ve been building a completely unique platform. SoundCloud users can discover more creators, at all stages of their careers, than anywhere else, and more music and audio: over 18 million creators are using the platform, sharing well over 110 million tracks, and reaching 175 million monthly active listeners. Additionally, comScore recently listed SoundCloud as being the 8th most popular app among millennials based on usage in the US.
Over the past year, we’ve continued to bring partners from the music industry onto SoundCloud. We’ve signed deals with PRS and UMG/UMPG, to add to the nearly 200 deals we’ve already signed, including those with Warner Music, Merlin and NMPA, as well as MCNs and independent creators. We’re focusing on enabling creators to get paid for their creativity, and on building a financially sustainable platform that our community can enjoy for years to come.