No, Soundcloud Won’t Be Forced to Shut Down Due to $44M in Operating Losses

dancemusicnw.com

It's a bit provocative to compare Amazon's chart against Soundcloud's... Everyone knew Soundcloud is losing money, but unlike Amazon in the last years, that seems like a lot of money for a company their size and in their ecosystem. I wish them the best but it doesn't look good...

Amazon is in retail, a notoriously difficult industry. Even today, it does less than 20% of Walmart's net sales and has less than 10% as many employees. People wrote the same style of articles about it for years and years. Amazon is still around because it was growing and could keep raising capital. It did so through two recessions, no less.

That doesn't mean SoundCloud won't tank. But it will tank because it hits a wall in terms of growth without a potential revenue model that works at a large scale.

I wonder, was Amazon losing money at the same scale? The graph in the article shows revenue is huge in contrast to loses, while it keeps growing while losses are stable. For soundcloud, increase in revenue means an even bigger increase in losses. That said, I don't know how it was for Amazon at the beginning. It is clearly that in the last years Amazon was willingly operating at losses, because it needed AWS to be competitive enough to dominate that market, so it was clearly an investment in the future rather than a struggle, from it's strong online retailer position which was making lots of money...

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