SoundCloud Cuts 40% of Staff, Closes San Francisco and London Offices (Jul 6, 2017)
SoundCloud is significantly reducing its staff and closing two of its offices in a bid to cut costs and reduce losses as one potential acquisition after another seems to fizzle. Twitter and Spotify were each reported as suitors earlier, but both ultimately moved on, and just in the last few days French music streaming service Deezer was also mulling an acquisition. I’m guessing these cuts are a sign that that deal also fell through and SoundCloud now realizes its only hope for survival is going it alone. That continues to be a really tough proposition, because SoundCloud continues to struggle to find a role for itself as a paid rather than free service. It’s become enormously popular as a free music source, but almost all the artists who start their careers on SoundCloud eventually cross over to the mainstream music industry and its more established business models, including paid streaming, which is becoming increasingly important and is driving almost all the revenue growth in the industry. SoundCloud’s failure to cross over with those artists to the paid streaming world is likely to be fatal unless salvation comes in the form of an acquisition.
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