SoundCloud, the world’s biggest music-streaming service, is still struggling to find a business model – it now has enough cash to last until fourth quarter, after laying off 40 percent of its staff, a representative said on Thursday.
But like them, it has yet to turn a profit. The big music labels on which most of the services depend – themselves under pressure from the shift to digital music – strike hard bargains.
And SoundCloud – which said three years ago it had an audience of 175 million, a figure it has not updated – lacks either Spotify’s large base of paying subscribers or the deep pockets of Apple and Amazon that can subsidise their music services.
Last week, SoundCloud said it was firing 173 staffers and closing its London and San Francisco offices to focus on Berlin and New York. “We’re on our path to profitability and in control of SoundCloud’s independent future,” co-founder Alex Ljung wrote in a blog post.
Technology website TechCrunch reported, however, that staff were told at a meeting this week that the layoffs only saved the company enough cash to hold out until the fourth quarter.
A spokeswoman the SoundCloud declined to comment on the TechCrunch article in depth. She did say, “SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability.”
She declined to comment on funding beyond the…