Another day, another internet music service dropping a ton of money. Last week Music Times reported that Last.fm had lost $3.4 million during 2013 but that's nothing in comparison to what Soundcloud managed to drop: The Berlin-based music cite lost $29.2 million during the 2013 business year according to the filings reports acquired by TechCrunch.
The good news, we suppose, is at least Soundcloud's losses come as part of a growth strategy.
"We are in a phase of growing SoundCloud into the market-leading platform for listening to, creating and sharing sound," reports the company in the filing. "This has necessitated investment in technology, headcount and marketing. Our overhead base has increased faster than our revenues."
We may not be business experts, and we know that investment is always required before growth, but we're less than convinced Soundcloud has total control here. As the HypeBot reported last week, Soundcloud has not been able to reach a royalty agreement with any of the major labels. No agreement, no music. And in order for there to be an agreement, it seems the company is going to have to throw more money into the mix, which it seems ill-able to afford based on the reports we're seeing.
The company made $14.1 million in revenues during 2013, which is admittedly an increase from 2012's $10,140,000. However that's not nearly enough to make up for the $29 million in losses, which is nearly double the $15.7 million lost during 2012. Either way, both years amount to total losses and, as Billboard points out, the number of competitors is only increasing. Soundcloud will need to find a solution quickly if it plans to stay afloat in this sea.