The music streaming service’s earnings before interest, taxes, depreciation and amortization (EBITDA) is around $2.1 million. This gain mirrors their near $32 million negative loss reported in 2022. A recent insight from Music Business Worldwide shows the company’s annual profitability sitting at a $310 million revenue.

In 2017, Raine Group and Tamasek acquired majority stake in Soundcloud for $170 million. At the time, the sale valued the company at around $300 million. In February 2020, it also received $75 million in investment from SiriusXM, making the satellite radio company a minority shareholder.

May of 2023 saw an 8% cut in their global staffing. Current CEO Eliah Seton touted the cuts as a way to “ensure the health of our business and get SoundCloud to profitability this year.”

The general sale of SoundCloud will not begin for “some months,” according to the Sky News report.

About SoundCloud

Since 2007, SoundCloud has provided a platform for users to upload and share music. Their user base consists of over 40 million accounts sharing over 320 million tracks to date.

SoundCloud’s impact on the music industry is strong, with its platform starting new genres and the music careers of modern artists worldwide. The company’s business mainly centers around subscription payments from listeners and ads, and creator-oriented platforms like their SoundCloud for Artists service.

Find more information on SoundCloud’s website.

Summing up their findings from the fiscal report, MBW states that the $218 million represents a 31% year-on-year growth. Their gross profit increased by 53% to $69 million and their operating losses shrunk by 41% down to $17.4 million as well.

After their record 2020 earnings, CEO Michael Weissman launched a new payment model for artists called “fan-powered royalties” (FPR). Under this model, each SoundCloud listener’s subscription or advertising revenue is distributed only among the artists to which they listen. This is in contrast to a “pro-rata” payment structure (i.e., what Spotify uses), where all revenue is pooled together each month and music rights holders get paid based on their market share of all plays. Around 100,000 artists were initially invited to participate.

This new payment model coincides with SoundCloud’s push to expand its Creator Services operation. With these services, artists can get help with digital distribution and other benefits to help their careers. Last month, they announced a new white-glove tier for Content Creators called the “roster.” Access to this level grants indie artists creative and financial resources as well as marketing support. As of now, eight artists are on the roster.

That is, according to Billboard, who cited multiple sources familiar with company operations. SoundCloud, who declined comment, is said to be currently working out the best way to incorporate the feature with plans to formally announce it before the end of Q1 2021.

The payment feature will mark one of the platform’s first major developments since Michael Weissman replaced Kerry Trainor as CEO in December. During Trainor’s tenure, which began in 2017 after co-founder Alex Ljung stepped down, the company introduced DJ gear integrations and other creator-focused tools that brought them to their first profitable quarter in 13 years.

Billboard notes that SoundCloud does not need major record label approval in order to roll out the direct payment feature. It is seen as a potential solution to dilemmas posed by the company’s pro-rata model. At present, a portion of total ad and subscription fees goes to artists based on number of plays without factoring in how much any single user streamed music from any single uploader.

SoundCloud also recently forged a partnership with multiplayer online game Fortnite to host an in-game live stream tournament called SoundCloud Player One on February 18th.

According to the report, SoundCloud followed an upward trend throughout 2019 with continuous increases from Q1 to Q4. Alongside the revenue gain, they also cut operating losses by 28% from 2018. It notes that the company is broken down into two divisions: their “Creator Business” and “Listener Business.” The former represents the promotional services the company provides to artists while the latter represents listener subscription fees and advertising revenue. As explained in the report, the listener segment represents about 2/3 of the company’s revenue while the creator portion accounts for the remaining 1/3.

SoundCloud CEO Kerry Trainor told the publication that the continuing success has given his company more room for investments. “With the end of 2020 now in view, we will have achieved our third consecutive year of accelerating revenue growth and our first profitable quarter, with substantial cash reserves to continue investing in SoundCloud,” he said.

You can view SoundCloud’s entire 2019 annual report courtesy of Music Business Worldwide.

SoundCloud has already verified eight of the platform’s most streamed artists, including Billie Eilish, Wiz Khalifa, and Trippie Redd.

In a blog post, SoundCloud announced that the new check mark feature was launched in an attempt “to help well-known artists stand out and maintain their authenticity, and to help listeners identify these artists more easily.”

Previously, there was confusion amongst users who mistook the orange star badge that identifies SoundCloud Pro subscribers for an artist verification badge. Consequently, many imitation profiles were mistaken for verified artist profiles. The company expects that the new blue check mark badges “will help eliminate that confusion.”

The current criteria for applying for a blue verification badge requires that the artist profile be maintained by a “well-known and/or highly searched-for artist, record label, collective, or curator. Obviously, that implies that the profile must also be unique, and not that of an impersonator or fan page.

The user must also adhere to all SoundCloud terms of service, and the profile requesting verification cannot contain any misleading information. It must have at least one track uploaded, and contain a bio and profile photo.

“We’re excited to continue supporting our community and to help well-known artists stand out on our platform,”  SoundCloud continued in the blog post. “Thanks for keeping it real with us.”

To learn more, check out SoundCloud’s blog post.

On SoundCloud’s mobile app, the options that appear when a user taps the share icon now include “Share to Snapchat.” According to a blog post, the “Share to Facebook” option will follow shortly. The feature applies to any public track, playlist or album.

“If you’re a creator, sharing your tracks on Snapchat or Facebook Stories is an effortless way to expand your reach and build upon your existing brand,” reads the post. “And if you love discovering new music, be the first in your crew to post about the songs you’re obsessed with — and get everyone else hooked too.”

SoundCloud’s full catalogue comprises over 200 million uploads at the time of writing. The company plans to announce additional hardware and software integrations in the coming months.

Serato, Pioneer DJ, Native Instruments and Denon DJ are a few of the brands that offer SoundCloud DJ integrations. The service costs $19.99 a month, and SoundCloud claims that it’s “the largest catalogue of any offline plan at a lower price than the competition.” The Virtual DJ and Algoriddim integrations also offer in-app track data, and they plan to introduce more tools for DJs in the future.

SoundCloud’s Second Chapter

SoundCloud’s journey to financial success has not been a swift one. Alexander Ljung and Eric Wahlforss founded the company in 2007, but it hemorrhaged money for the first decade of its lifetime. When The Raine Group and Temasek Holdings purchased a dominant share of the company in 2017, Ljung stepped down as CEO to make way for former Vimeo CEO Kerry Trainor to take his place.

Trainor’s tenure has seen SoundCloud add value to its subscription service and amass more paid users as a result. In 2019, the company posted double the revenue ($200 million) and a narrower net loss according to Music Business Worldwide.

More information on SoundCloud DJ can be found in this blog post.

Image credit: Brandon Erlinger-Ford

Using the two streaming services, equipment owners will be able to search for music from each of the platforms’ libraries and download tracks directly onto the device. This allows DJs to access music from their online collections without the need of external storage. When downloaded, the tracks are analyzed and song information including key, BPM, and waveform are displayed.

On their YouTube channel, Denon DJ shared a video demonstrating the features included in the latest Engine OS update. Although brief, the video provides a visual tutorial DJs can use to learn the new features.

In addition to the Beatport LINK and SoundCloud GO+ integration, several bug fixes were deployed alongside a new BPM detection algorithm and “Quick Source Menu.” The latter is an interface that allows users to quickly switch between media devices, streaming services, and more.

Version 1.5 of Denon DJ’s Engine OS is out now. Download the latest update and read the complete patch notes on their website here.

“Mastering on SoundCloud” costs $4.99 per track for regular users. SoundCloud Pro subscribers can enjoy three complimentary masters each month, with each additional one costing $3.99. Mastering software developed by Dolby allows the user to put the finishing touches on their music without so much as opening another browser tab.

“Dolby’s mastering technology doesn’t just analyze your track, it critically listens to your music similar to the way an engineer would – identifying the details, the sections, and musical transitions that give your song its unique story arc,” reads a SoundCloud blog post. “Using the mastering profiles of your choice, this detailed “sonic map” is then used to sculpt the tone and overall dynamic profile of your mix while prioritizing your creative intent.”

Since Kerry Trainor came onboard as CEO in 2017, SoundCloud has made significant strides towards solvency with gear and software integrations. The company announced partnerships with manufacturers like Pioneer DJ and Serato allowing DJs to stream tracks directly to their decks during performances towards the end of 2018. In April of 2020, they unveiled a marketing and distribution platform called Repost.

Find more information on the official page for Mastering on Soundcloud.

Image credit: Drew Patrick

Rumors that The Raine Group and Temasek Holdings would purchase a dominant share in SoundCloud had surfaced last week, and a statement posted to the latter company’s website confirmed it. According to Axios, the capital raised to keep the platform afloat amounts to $169.5 million.

Ljung will not step away from SoundCloud altogether. He will still remain chairman of the company, and co-founder Eric Wahlforss will also stay onboard as chief product officer.

Musical Chairs

For their part in the agreement, two positions on the board will go to Raine staff members Fred Davis and Joe Puthenveetil. The former Raine partner used to be a music industry attorney, and the latter is the company’s vice president in charge of music investments.

The new Series F round of investment is SoundCloud’s largest to date, and gives Raine and Temasek more liquidation preferences than any previous investors. All Series E investors’ preferences will be reduced by 40%.

SoundCloud has reported its annual run-rate revenue at $100 million, but has not disclosed recent figures for its expenses.

Source: TechCrunch