Soundcloud has historically had some financial trouble. Back in 2014, it was flourishing in venture capital, having just raised a sweet $60M in series D rounds, giving the streaming platform a valuation of $640M. However, this glory didn’t last forever. Soundcloud had a problem, it wasn’t making money. In 2017, they closed their London office, shut the doors on their San Francisco location, and terminated 173 jobs. They are currently competing in the same space as big players like Spotify, Apple Music, and Google’s Youtube Red, offering a paid subscription to access music published by large record labels, but Soundcloud’s userbase isn’t interested in big labels, instead looking at independent artists only Soundcloud provides.
Back when Soundcloud was close to certain financial death, they shuttered their API access, which enables developers to interact and extend SoundCloud features. Most social networks include an API: Facebook, Twitter, Youtube, and Instagram all offer lots of data and capabilities through their API. Developers have historically used these APIs to extend features on these social networks and make them more appealing, growing the user base and increasing user engagement. Soundcloud has walled itself off from these capabilities, potentially to save on server costs.
However, this was done over a year ago and Soundcloud still has no intention of re-enabling their API, potentially since they still face a foggy future.
What Soundcloud needs to do is to find solid advertisement partners and encourage more creators to upload content. They had spent their funding on creating the infrastructure for steaming big label music, but it was too little too late. The music streaming market is overly saturated, and it is unlikely that Soundcloud will be a big player here. However, Soundcloud has the independent artist scene that it can cash in on. Only time will tell what happens to Soundcloud, but until their API is re-opened, I can’t say that it is on solid ground.