Business

It is not just about SoundCloud

Today we were warned that SoundCloud might close within 24 hours.

Late in 2015 (while at RNZ) I recommended strongly against hosting audio content solely on SoundCloud. Based on the numbers at the time, I predicted they would need to be acquired with 18 months to continue. We didn’t do it.

I’d already built a bespoke audio solution for RNZ because the economics for a platform of that nature simply weren’t there, without a business model.

Sadly I think that truth (you need a business model) is going to increasingly hit home for other platforms over the next 12-18 months.

People forget that many startups are funded for growth and do not make a profit, but in the expectation that they will one day. Or that they will be acquired, based on some perceived ‘value’. Many have not yet worked out a viable business model, and are burning cash faster than they can increase revenue.

Often, the only hope is that they are acquired, and perhaps rolled into some other business with deep pockets, or one that can find a business model that works as part of a suite of related products. Either way, someone has to pay once the investors don’t want to continue.

It’s not just SoundCloud either. There are a lot of these tools at risk right now – live blogging, graphing, collaboration, commenting and survey tools, to name just a few.

When they fold, large amounts of content will just blink out of existence, archives will be gone, and the value created will be lost.

That’s a crying shame, and something that could have been avoided with a bit of foresight and planning. Or just a simple backup.

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