Digital Music News has reported that a number of "sources" and "insiders" are claiming that SoundCloud is losing money. To be exact, the streaming service is allegedly "dangerously low on cash", despite having been recently valued at over $700 million. The blame, according to those in the know, lies with major labels; as one insider put it: "Investors want to see what happens [with the majors] before they put more money into it."
They've been paying lawyers instead of focusing on expanding the business, something that is always certain to help a company haemorrhage money any day; although there's a deal (and a 5% stake in the company) worked out with WMG, both Sony and UMG are threatening to sue SoundCloud. Another source mentioned that Sony had demanded $35 million in negotiations with Tidal, hinting that perhaps the same sort of thing had been levelled at SoundCloud, too.
Just this weekend, SoundCloud announced that they'd be pursuing a subscription tier for their service. Music Week reported that Eric Wahlforss, co-founder and CTO of SoundCloud, confirmed the news that the company would be launching its subscription tier later this year. Details are few and far between, but it was stated that a capped number of streams would go to the free tier, whilst unlimited streaming was on offer for the paid subscription. Exact date, rightsholders shares, and cost of subscription are unknown.
Why not keep SoundCloud as it was intended, as a music sharing and musicmaking community site, and leave the major labels to squabble over more "music streaming" / less "music sharing" entities, like Apple Music, Spotify and Tidal?