Twitter CEO
Jack Dorsey had invested in the music streaming service SoundCloud in 2016. One year later, he wrote off the deal. This
investment is a constant reminder that it is very difficult to make money with digital music.
Twitter had initially put the money in SoundCloud, when the company was valued at $700 million. However, as revealed in an article in
Variety, Twitter's 2017 report showed that the company had written off over $66 million that it had invested in SoundCloud, since that amount is not expected to be recovered anytime within a reasonable time period.
This write-off should not be a shock since nearly all of SoundCloud's investors were in a last-ditch funding deal this past summer. Two years before this investment deal took place, Twitter had looked into purchasing the streaming service SoundCloud for over one billion dollars, but it bailed out; moreover, although consumers have accepted paid music streaming services, the companies that run those services are not embracing them, since they are
not making any profits.
It was also reported that the streaming service
Spotify has filed to go public on the New York Stock Exchange (NYSE) within the next few months.
SoundCloud has been pushing its subscription service for $10 a month, similar to the ones for Spotify and Apple, however, it is changing its focus. SoundCloud CEO, Kerry Trainor,
noted that they will be focusing on a more limited monthly plan (for five dollars), and a renewed subscription service for producers, creators and consumers.
