Soundcloud, the popular audio streaming service was in a lot of trouble this time last week. Suffering financially, the company had until Friday to find heavy investment or risk wrapping up. Fortunately, the investment has come and the Soundcloud service is ‘here to stay’.
Soundcloud certainly isn’t as popular as its competitors. Although there are alternatives, Spotify largely has the mobile music streaming platform pretty sewn up. Soundcloud, however, was popular for a different reason, it encouraged independent musicians to share their creations on an easy to upload platform.
Although there are some high-profile musicians who exclusively use Soundcloud, it is largely aimed towards musicians who want to share their work. As such it largely avoids the legalities of royalties or the lost income of stream-ripping.
Based on a large number of independent users, the site was struggling to generate the cash flow necessary to maintain such large servers. Having parted company with over 140 staff members earlier in the year in an attempt to tighten the financial belt, the worries were that the company still needed a significant cash injection to survive.
The financial difficulties reported this last week sent a lot of Soundclouds users into a panic, worrying that their uploaded creations may suddenly vanish.
Download Panic is not just a great name for a band, it was also a reality here. With the impending closure last Friday, Soundcloud traffic was almost at bursting point as its users were desperate to retrieve all of their content from the site before the servers shut-down.
Fortunately, a last minute deal has seen a $170m investment deal which has saved the company reports the BBC.
With the money, it can continue to operate and hopefully find some stability in the future. It may never achieve the heights of its competitors, but that’s ok. What it offers might serve as the niche platform people need.
Spotify’s dominance may even be looking to continue as they look towards their own audio hardware.
The financial backing has however taken at least one victim. Former director Mr Ljung will be replaced as chief executive by Kerry Trainor. Hopefully, the new CEO can help move Soundcloud into a more stable and profitable business platform.
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