Over the past week, the music industry was hit with the news of SoundCloud’s purported financial troubles. Troubles so serious that many thought the end of the streaming giant was near.
It was TechCrunch who first broke the story regarding SoundCloud’s troubles, and it painted a very grim state of the struggling platform. About 40 percent of its personnel were laid off in the last few weeks as the company struggles to stay afloat. Despite such moves though, news was that SoundCloud was still short on the needed funds for its operations and the projection was that unless a new cash influx came in soon, the company only had until Q4 of this year to sustain its current operations. We reported on the TechCrunch article ourselves, but were clear to state that the company still had time to find investors or even a buyer, and that thus this was not necessarily “the end of SoundCloud” as many were already believing.
In the wake of the article, SoundCloud came out firmly denying the TechCrunch article. It went so far as to issue a statement which reads:
“There are a number of inaccuracies within the TechCrunch article. They seem to stem from a misinterpretation of information by one or two laid off employees during a recent all hands meeting. Due to the extensive number of inaccuracies, we will only comment regarding funding and layoffs. To clarify, 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. In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.”
Despite the assurances, SoundCloud’s statement did little to alleviate the concerns regarding its current state. Especially that of TechCrunch’s Josh Constine, who wrote the original article, and who issued a statement in reaction to the SoundCloud blog above, saying that it “clumsily attempted to refute our TechCrunch article on its financial and morale problems by issuing a statement…saying our post contains ‘extensive inaccuracies,’ yet its supposed ‘corrections’ simply repeat what we did publish, and refute something we didn’t publish… TechCrunch stands by its reporting.”
In the middle of last week Chicago’s Chance The Rapper seemed to take SoundCloud’s woes to heart, claiming on Twitter that he got on calls with the music company’s founders to discuss the problems. The call was followed by tweets from both the rapper and SoundCloud claiming that the company wasn’t going anywhere, many leading to believe that Chance was directly responsible for saving the future of a streaming service that hosts the work of much of electronic music, hip-hop’s and rap’s up-and-coming music talent.
*airhorn* Spread the word: your music isn’t going anywhere. Neither are we.
— SoundCloud (@SoundCloud) July 14, 2017
Last Thursday Chance went on Twitter and wrote, “I’m working on the SoundCloud thing.” The internet quickly speculated that he was either going o buy the company or somehow be involved in “saving” it somehow. He followed that up with Friday morning tweets relating to SoundCloud, getting his fans involved when he wrote, “@ an artist who you wouldn’t know if not for SoundCloud,” quickly followed by “Now link me to a song on @SoundCloud that you swear you’re responsible for like atleast a thousand plays.” This was followed by a Friday afternoon tweet that read, “Just had a very fruitful call with [SoundCloud cofounder] Alex Ljung. @SoundCloud is here to stay.”
We’re gonna keep providing you with the tools to discover, share and connect.
— SoundCloud (@SoundCloud) July 14, 2017
It’s hard to know if Chance’s contribution in keeping SoundCloud alive is moral, financial or both. On the wake of all the SoundCloud chatter, Chance convinced Young Thug to premiere their new track “Big B’s” on the streaming platform. SoundCloud was quick to Twitter also, claiming they and the music hosted on their site wasn’t going anywhere. They also tweeted a link to Chance’s new single collab with Young Thug.
Here’s to musicians, DJs, #SoundcloudRappers and many, many more mixtapes.
— SoundCloud (@SoundCloud) July 14, 2017
One thing that can be gleaned from this back and forth is the fact that SoundCloud is indeed facing difficulties with regards to its continued operations. What remains to be seen though is whether SoundCloud’s assurances as noted in its statement have merit and if they will indeed be enough for its continued operations at least beyond 2017.
Either way, it is something we will very soon find out.
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