BERLIN (Hypebot) – This is the year that SoundCloud has promised to launch a paid music service and start paying more to the artists that create the music that draw millions of listeners to the service. But first it has to survive growing multi-million dollar losses.
SoundCloud lost $56.5 million in 2014 according to new UK filings. The loss almost equals the $60 million in investments the music service raised that year. Revenue was $25 million in 2014.
“Our overhead base has increased faster than our revenues,” admits SoundCloud in the filing first reported by Music Ally. “After making inquiries, the Directors have concluded that they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future,” the filing continues “However, the Directors have concluded that there are material uncertainties facing the business.”
SoundCloud raised another $35 million earlier this year, but expects to operate in the red for at least 3 more years. SoundCloud was launched in 2008 by Alexander Ljung and Eric Wahlforss,
SoundCloud recently completed deals with two of the three label groups and many indie labels, which likely adds to its future financial obligations. “The Group’s business plan shows that further capital investment will be required in the next 12 months to fund the business," the report concluded.