SoundCloud, a popular music streaming platform, is finally turning a profit after years of struggles. The company is projecting annual revenues of €288 million (USD $310m) for 2023, up 7.5% YoY. Additionally, SoundCloud's EBITDA is moving into the black, with the company forecasting a €2 million positive EBITDA for 2023. This significant improvement from the €29 million negative EBITDA posted in 2022 marks a turnaround for the company.
SoundCloud's profitability is due to a number of factors, including a 30% YoY increase in annual revenues from fan subscriptions, a 4% YoY growth in SoundCloud's "creator" business, and more efficient spending on marketing, people, and overhead. The company also cut 8% of its global headcount in May to ensure profitability. Eliah Seton, SoundCloud's CEO, then said: "This is a challenging but essential decision to ensure the health of our business and get SoundCloud to profitability this year."
Eliah Seton attributes the company's success to its focus on the fan-to-creator economy. He says that SoundCloud is now "building the future of fandom and the fan-to-creator economy."
The company's profitability is a positive sign for the music industry, as it suggests that investors are valuing annual income as much as they do ambitious growth. SoundCloud's success could pave the way for other music streaming platforms (not as big as Spotify or Apple Music) to achieve profitability in the future.
