By all accounts, SoundCloud is in serious trouble now that its paid service, SoundCloud Go, has failed to catch on. Reports indicate the music service — once a hot spot for DJ mixes prior to the company’s clampdown due to record industry complaints — may now be up for sale.
Bloomberg says sources tell it the company is now looking for a buyer, and is seeking upward of $1 billion in the sale. So far, no one appears interested at that price, the report indicates. Part of the problem might be a recent round of funding attracted $70 million from Twitter, which placed the company’s value at $700 million, far short of what SoundCloud is looking for.
The reasons why no one is biting probably has to do with the troubles with SoundCloud Go, which is only four months old. Apparently, only a small portion of the service’s estimated 175 million users have signed up. Reviews call the service “a mess,” and its music selection is not as diverse as other services, even though it now has deals with all major labels.
A sale has been discussed by company executives for some time, Bloomberg says, but no decision on whether or not to sell has been finalized. The company’s struggles might indicate SoundCloud needs to re-evaluate its strategy overall. It has apparently abandoned the mixtape emphasis that made it famous for a more traditional music service model.
The problem with that strategy is that the music service business already is quite saturated, with Spotify, Apple Music, and others commanding a large portion of the market. It may have not had to change strategy in the first place, either: Rival Mixcloud has had great success in striking deals with the record industry to protect DJs using the service, and has benefited from SoundCloud’s stumbles.
A representative for SoundCloud did not immediately respond to requests for comment.