SoundCloud has been rescued from bankruptcy and near extinction with only one months of capital to keep them going by securing £135M ($170M) of investment.
Part of the deal will see foundering member and Chairman of SoundCloud Alexander Ljung stepping-down, but he stated that, “SoundCloud is here to stay,” which is the most important outcome for the platform; who help-out independent artists and musicians across the globe.
SoundCloud is based in Berlin, Germany, and has already laid-off 40% of its staff.
New blood is coming-in to make SoundCloud more profitable so it can survive in the digital age. Alexander Ljung will be replaced by Kerry Trainor who will have the job title as Chief Executive, who was the CEO of video-sharing site Vimeo.
Another new recruit in the management of SoundCloud is Mike Weissman whose job title will be Chief Operating Officer, like Kerry Trainor he also worked at Vimeo.
Like most online platforms the need to start getting a reasonable income to be able to provide the service for both user and consumer is something the tech-sector is battling for.
Investors are becoming more cautious in giving money to tech-companies. The new vision and direction from investors is to see income revenues increase year on year. The collapse of the tech-industry of the late ‘90s and in the early 2000s is a warning of just handing over money without scrutinising the returns in the foreseeable future.
Advertising is the main revenue stream for online platforms, but subscriptions is also another revenue stream that can increase income considerably.
Though, when you start-up and the respective online platform is for free, it is very hard to start asking for money from your users; as they are reluctant to pay for subscription or for a service. This is the challenge now not only for SoundCloud, but for online platforms as a whole.
“Online Platforms need to show increases in revenue”