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How Does SoundCloud Make Money (Business and Revenue Model)

The SoundCloud business model

How Does SoundCloud Make Money?
Here’s what you should know:
  • What is SoundCloud, and how does SoundCloud work?
  • How does SoundCloud make money?
  • SoundCloud Go and Go+
  • SoundCloud Pro and Pro Unlimited
  • Advertising
  • SoundCloud’s Subsidiaries, Acquisitions, and Exits
  • SoundCloud’s profit and revenue
  • What is the SoundCloud business and revenue model?
  • SoundCloud’s funding and valuation

How does SoundCloud make money if it’s free? Here is a full, in-depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the SoundCloud business model, their year-over-year revenue, and how SoundCloud works.

What is SoundCloud, and how does SoundCloud work?

SoundCloud is an online audio distribution and music sharing platform that empowers users to upload, promote, and share their music that can be streamed and shared by other users on and off the platform.

Founded in 2007 by Alexander Ljung and Eric Wahlforss, SoundCloud has over 25 million music creators and 175 million monthly listeners on its platform.

How SoundCloud works is: Once a user creates an account, they can upload and listen to content for free on SoundCloud’s platform but will run into account limitations such as ad breaks, no ability to collect royalties for your work, and more. On the other hand, both listeners and music creators also have the option to upgrade their accounts to paid subscription plans that get rid of the feature limits mentioned above.

Some of SoundCloud’s competitors include Spotify, Apple Music, Pandora, TIDAL, Bandcamp, and other music streaming platforms.

SoundCloud App in Apple App Store | SoundCloud Business Model | How Does SoundCloud Make Money?
Source: Apple App Store

How does SoundCloud make money?

According to SoundCloud’s advertising page, they attract more than 175 million monthly listeners. So how does SoundCloud make money off of all these users?

Below is a breakdown of how much money SoundCloud makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how SoundCloud makes money (in 2021):

SoundCloud has a revenue model that makes money in three (3) ways – SoundCloud Go, SoundCloud Pro, and advertising.

#1. SoundCloud Go and Go+

SoundCloud makes money through its subscription service, SoundCloud Go.

The service offers two (2) subscription tiers: SoundCloud Go and SoundCloud Go+. Subscription costs vary based on the tier and each tier comes with its own set of perks such as ad-free listening, the ability to save an unlimited amount of tracks for offline listening, high quality audio, and more.

SoundCloud Go Cost:

  • Go: $4.99 per month
  • Go+: $9.99 per month

#2. SoundCloud Pro and Pro Unlimited

Another subscription service SoundCloud offers is SoundCloud Pro.

Different than SoundCloud Go, which is for listeners and fans, SoundCloud Pro is a subscription service for music creators on the platform.

The service offers two (2) subscription tiers: SoundCloud Pro and Pro Unlimited. Subscription costs vary based on the tier and each tier comes with its own set of perks such as the ability to distribute your tracks to all major music services, collecting royalties on your work, and more.

SoundCloud Pro Cost:

  • Pro: $2.50 per month
  • Pro Unlimited: $12 per month

Note: SoundCloud has a subscription service for both the fans and the music creators on its platform.

#3. Advertising

SoundCloud also makes money by advertising with both brands and artists on the platform.

For brands looking to advertise on SoundCloud, they can choose between audio advertising as well as display, native, and sponsorship advertising placements. Some of those brands include Amazon, Microsoft, Sony Pictures, Red Bull, Netflix, Starbucks, among others.

For artists, they can use SoundCloud’s Promote on SoundCloud tool to promote their music through advertising. There is a minimum spend of $25 per promotion.

SoundCloud’s Subsidiaries, Acquisitions, and Exits

To date, SoundCloud, Inc. has made a total of 2 acquisitions.

SoundCloud’s profit and revenue

SoundCloud’s latest reported revenue is $166 million from 2019. They have not yet released their 2020 earnings.

What is the SoundCloud business and revenue model?

SoundCloud makes money through a few revenue models that they combine within their company, they are:

  • Subscription business model
  • Advertising business model
  • Revenue sharing business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

SoundCloud’s funding and valuation

According to SoundCloud’s Crunchbase profile, SoundCloud has raised $542.8 million over 10 rounds and was last valued at $500 million back in 2017, according to PitchBook.