It's Incredibly Expensive to Run a Music Streaming Site � So Consolidation Could Be On the Way
SoundCloud CEO Alexander Ljung. Flickr/Sorosh Tavakoli Spotify isn't making any money. It's not even close to profitability. Its most recent accounts show it made a $194 million (�149 million) loss in 2015. And if you thought that was bad, German music streaming startup SoundCloud's finances may make you wince . It lost �39.1 million (�33 million) on revenues of just �17.3 million (�14.9 million) in 2014. It's no surprise, then, that The Financial Times reported on Wednesday that Spotify is in advanced acquisition talks with SoundCloud. Spotify has a business model that's all about hooking in free users through its ad-supported tier, and then (hopefully) converting them into paying every month for the service. SoundCloud could help funnel more people into Spotify, while keeping itself as a slightly more niche streaming site focused on original content by DJs and smaller artists. There have bee...