Business News Digital

SoundCloud plays down talk of “fire sale”, opens up Premier to DJs

By | Published on Tuesday 14 March 2017


For fans of doom and gloom SoundCloud speculation, here comes your monthly fix. Recode has cited some of those pesky anonymous sources as saying that the digital firm’s owners may now be willing to consider bids to buy the company providing the proposed price is higher than the total investment it has raised to date, which is about $250 million. This despite the start-up having been valued at over $700 million at one point.

It’s no secret, of course, that SoundCloud has been busy trying to raise new finance while also talking to possible outright buyers. Spotify was hotly tipped as a potential buyer for a while last year, though it’s thought in the end the asking price was just too high.

SoundCloud has, arguably, been over-valued for some time now and it’s seemed likely that, as the cashflow dries up, much lower bids would eventually be considered. Which, of course, has meant that potential bidders will generally be happy to play the waiting game.

In a statement to Billboard, SoundCloud played down the levels of doom and gloom in Recode’s report, in much the same way it did when the Financial Times recently quoted a financier dubbing the firm’s latest financing pitch as passing the begging bowl round the investment community.

Not commenting on rumours and speculation while commenting on the latest rumours and speculation, SoundCloud said: “While we do not comment on rumours or speculation, we can say the latest Recode article doesn’t accurately portray the current state of the SoundCloud business”.

Bigging up its newish premium service, and brand new mid-price subscription package, it added: “We are actively speaking with a variety of potential investors and other strategic partners. These conversations, led by our recently appointed CFO Holly Lim, reflect the market interest in our differentiated platform, unmatched user reach and strong outlook for 2017 and beyond. We expect to see 2.5x year-over-year revenue growth in 2017, driven in part by SoundCloud Go, our just-launched mid-priced consumer subscription”.

Away from the not commenting on rumours and speculation, SoundCloud announced that it was opening up its Premier level – where creators can opt-in to share in the advertising and subscription revenue the firm generates – to DJs and producers for the first time. Given that “DJs and producers are an integral part of the SoundCloud ecosystem” the firm said in a blog post it was “psyched” to allow those people to join the revenue share programme.

It’s an interesting development, in that it means those posting mixes and remixes onto the platform can now also earn, in addition to those posting original tracks and – presumably – those who control the original tracks contained within the DJ or producer’s mix. Various streaming services have been trying to work out efficient ways to distribute streaming royalties on unofficial mixes, so that the labels and publishers who own the tracks being remixed can earn in addition to whoever did the mix.