So why aren't they making money?
Let me take a stab at why: its too focused on the indie scene. Sad to say, but in this day and age, being the platform to support indie anything only is never going to be as lucrative and supporting the mainstream.
Soundcloud is a great platform. It gives anyone the opportunity to upload their creation onto their platform and share it with the world. Much like YouTube, it is a platform that focused on the indie musician first. Although there are a lot of more mainstream artists to be found, the mainstream is not why you would use Soundcloud.
YouTube and Soundcloud is not too different. Both providing a platform for amateur and professional creatives to share their work with the world. YouTube had a few benefits that made it the behemoth it is today, namely a strong add and monetization strategy, and the backing the Google themself. They had the creative freedom to continue operating at a loss while still providing people a free and open platform. Soundcloud is the same, but it does not have a strong creator monetization strategy, or the backing of any real big players. If they run at a loss, its a direct hit to the company bottom line. And while YouTube grew in stature, Soundcloud got left behind by its competitors like Apple Music, Google Play Music and Spotify. At the end, why would I as a consumer pay for an additional music services of a bunch of unknown, amateur artists when I've got millions of song I already know and love through other services. The consumer only has so much money to spend. And Soundcloud is very low on the priority list.
While Soundcloud does have adds support on its free level, it have nowhere near the same user base to work from to adequately cover the huge hosting costs it probably takes to maintain the service. Their reluctance to sell or partner with any of the big players also puts them well behind any of those players offers.
I sometimes hate that I've become this much of a capitalist, but its the realities of the world. Free ventures supporting individual creators are more likely to fail than succeed without the backing or acceptance of the mass audience. Honestly, my question was never why isn't Soundcloud making money, rather why haven't they run out of money sooner...
