Proving that the digital music industry is far from being a cash cow, Twitter recently wrote off the $70 million USD investment it made in SoundCloud.
In 2016, Twitter’s ventures unit injected the staggering sum of money into the free music streaming platform that at the time was valued at $700 million USD. But in its 2017 annual report, Twitter is writing off the large investment because the money put in is “not expected to be recoverable within a reasonable period of time.” Although the loss is definitely not small, the social media platform can afford to take the loss after generating $2.4 billion USD revenue, and $4.4 billion USD in cash and short-term investments by the end of 2017.
Following a potential closure, SoundCloud is looking to pivot to make its streaming services viable once again. Moving away from its $10-a-month USD subscription service, SoundCloud has made available a limited $5-a-month USD plan to music creators, producers and other prosumers.
Watch SoundCloud CEO Kerry Trainor talk about the streaming platform’s upcoming plans below.