‘25 million plays, and zero dollars’ - A Look at the SoundCloud Business Model

[Mandolin Picker]

Over at the Verge web site they have an interesting article on SoundCloud, what it has done right, wrong and more importantly what caused the problems it is having now.

 

"In December 2012, as part of a major redesign, SoundCloud introduced a feature called the repost. Similar to Tumblr’s reblog or Twitter’s retweet, reposts were designed as a way to help new music spread virally. But from the start, artists abused the feature by constantly reposting their own tracks, pushing them back to the top of their followers’ feeds every few days. Artist collectives made agreements to repost one another’s songs, and eventually, a popular music blog was caught selling “slingshot” packages that included paid reposts. Fans and artists alike loudly complained — but SoundCloud, which was busy fighting an existential threat from major record labels, didn’t address the abuse for nearly three years.

 

"In the meantime, artists and fans alike flocked to rival services like Spotify, Google, and Apple. Ask the artists who first turned SoundCloud into a premier destination for discovering new music and they’ll tell you that they abandoned it only after years of neglect on the platform. Interviews with artists, producers, and managers illustrate how SoundCloud squandered early enthusiasm for its service with a messy transition to a paid business that ultimately made little money for artists — or SoundCloud — while driving away the listeners and creators that were its lifeblood."

 

Read the entire article at https://www.theverge.com/2017/7/21/15999172/soundcloud-business-model-future-spotify-streaming

 

[audioicon]

Its difficult to steer something when the foundation lacks proper solidity.

Facebook was lucky, meaning they were smarter. Anybody can start something and it can quickly grow out of hand.

 

First thing is, it started as a free community like service, then you decide people should pay, YouTube did the same thing, they have tried to introduce a pay system and this is their third try.

 

Once you start something and it gets growing quickly, then it becomes difficult to maintain because you do not have the capital. Sometimes an idea takes of as unexpected and you cannot control the spread.

 

I feel this is what has happened to SoundCloud, and it's sad because most of these other platforms are taking ideas from them but also learning from their mistakes.

 

This section of the article tells me the service was never started on the right foot?

 

"Now SoundCloud’s future is uncertain. Acquisition talks from both Twitter and Spotify fell apart. In 2014, Twitter said its reasoning was that “the numbers didn’t add up.” Sony pulled out of streaming agreements in 2015, citing a similar concern of “a lack of monetization opportunities.” The company’s valuation is sinking, and on July 6th, it announced it had laid off 173 employees — 40 percent of its workforce — and shut down its London and San Francisco offices."

 

It's easy to run off with ideas and create things but business is a whole different domain.

 

[Bucksstudent]

MySpace had the perfect model before Facebook came along. It doubled as a social media and music site, which doesn't sound too original now, but in 2005 it was not only a way to socialize with friends in a trendy way, you also discovered new music or streamed some of your music for people to discover. It was cool to just add people and they'd add you back without a worry of privacy or molestation (when it came to the music).

 

Soundcloud is purely for the music. How often do teenagers or twenty-somethings look for unknown artists without a label? Not enough to justify a whole site for that purpose.

[BlueGreene]

Soundcloud is my preferred platform for music discovery, used every single day. Countless hours have been spent developing my following list, and it hit a critical mass of sorts somewhere after following 1K people. I pay for Go and pro unlimited services. It would break my heart if they went away.

 

Part of the push away from SC, from where I'm at, was their attack on DJ mixes. That pushed a lot of electronic music off the platform. A couple labels I know had trouble with SC algorithms blocking their posted tracks in single or mix format. The technical support wasn't very helpful apparently.

 

They added a bunch of stuff like the related tracks section and the discover option. Too little, too late. I sure hope they can survive.