Soon joining the Great Cloud in the Sky
February 12, 2016 8:08 AM   Subscribe

SoundCloud has lost more than $70 million over the last two years. Recently released financial statements paint a grim future for the streaming service, as despite an increase in investment they still struggle to capitalize on a userbase close to 200 million. FACT presents five reasons why.
posted by lmfsilva (100 comments total) 11 users marked this as a favorite
 
Great I just recently discovered soundcloud and really like it now it may be gone! Grrrrr In addition I do not see any equal alternative. And yes I have been to spotify, rhapsody, pandora, etc.
posted by robbyrobs at 8:12 AM on February 12, 2016 [2 favorites]


Aside from a few cosmetic improvements, SoundCloud has been much the same site since it launched in 2007,

I would disagree with that. In fact, about two years ago the "New SoundCloud" was rolled out with all the grace of a drunken hippo, and it went from being a place I went nearly every day to check out music and connect with people to "oh, that [unprintable] [unprintable] thing." This was not due to cosmetic changes.
posted by Wolfdog at 8:12 AM on February 12, 2016 [10 favorites]


iiHeartMedia, née ClearChannel, operator of online streaming service iHeartRadio has $2B in debt and lost nearly $800M in 2014, 2015 doesn't look much better. Rdio went out of business last year, got bought by Pandora, who are now looking to sell themselves. Tidal has never made money as far as I can tell.

So basically whatever music service you like, if it's not Apple, Spotify or Google, it's probably going to die soon.
posted by GuyZero at 8:13 AM on February 12, 2016 [9 favorites]


Oh yeah, Rhapsody lost $21M in 2014 as well, so yeah, they're not so hot either.
posted by GuyZero at 8:15 AM on February 12, 2016


You could build an app based on torrent protocols and backed by a very low-cost tracker service which does the same thing, and which could be much more sustainable. I hope the files are lifeboatable.

(I just said lifeboatable... oh god, it's got me)
posted by Devonian at 8:16 AM on February 12, 2016 [1 favorite]


I have quite a few friends who use SoundCloud for their musical output and a lot of them are talking about how this reminds them that no matter what service they use to create, they will always be at the whim of forces bigger than they.
posted by Kitteh at 8:18 AM on February 12, 2016 [12 favorites]


If there is a service that you use and like, but do not pay for, you should assume it will not last.
posted by Rock Steady at 8:21 AM on February 12, 2016 [42 favorites]


Avaricious rent-seeking corporations vs. Mathematics.

The business people have lost, they just do not accept the fact.

Math, as in hard encryption inconveniently provides the transmission of sound as bits in a way that no one not the NSA or anyone can track. There are increasingly larger repositories of music on private secure servers hidden in the cloud. Long term the balance will shift unless all the wires to the internet are cut. It sure is a wonky long transition.
posted by sammyo at 8:21 AM on February 12, 2016


I just use it to listen to podcasts (if I can find them) on Android. I typically listen to the Strangers podcast, Guardian Long Read, Guardian Politics Weekly, and the Private Eye podcast.

Is there another place out there with an app where I can listen to all of these podcasts in the same place for free?
posted by My Dad at 8:21 AM on February 12, 2016 [1 favorite]


You could build an app based on torrent protocols and backed by a very low-cost tracker service which does the same thing, and which could be much more sustainable.

None of these services are losing money because of infrastructure costs. Serving infrastructure has never been cheaper and gets cheaper every day.
posted by GuyZero at 8:21 AM on February 12, 2016 [5 favorites]


Is there another place out there with an app where I can listen to all of these podcasts in the same place for free?

Any podcast app? Pocketcasts. Podcast Republic.
posted by GuyZero at 8:23 AM on February 12, 2016 [4 favorites]


iHeartMedia, née ClearChannel, operator of online streaming service iHeartRadio has $2B in debt and lost nearly $800M in 2014, 2015 doesn't look much better.
I gotta be honest... I'm not gonna cry much if ClearChannel bites it.

Perhaps we can go back to having "your local radio stations" actually be owned and operated... you know, locally? Right now most of them are nothing more than a thin veneer of a few "local sounding" bumps on top of the same top-of-the-charts mixes that all the stations play. Maybe if you're really lucky, there'll be a "DJ" for an hour or two who'll play whatever requests aren't too offensive or too edgy or too far outside of the target sound that the company and the labels have identified that you should be hearing. They might even mention $LOCAL_SPORTING_EVENT so that you know they're really just like you! It might be the sassy-30-something woman who does that quirky morning show. Or the still-cool but 40-something-sounding guy who remembers how awesome that album was when it came out. Oooh, or maybe it's the younger guys who's hip to what the kids like these days (provided that it's a chart-topping song that the kids like).

It's all so sterile and painfully fake.

Don't let the door hit you on the way out, ClearChannel.
posted by -1 at 8:26 AM on February 12, 2016 [29 favorites]


Yeah, I'm neither here nor there on iHeartMedia as a media conglomorate, but as a music streaming service it's one more example of death by success.
posted by GuyZero at 8:32 AM on February 12, 2016


If there is a service that you use and like, but do not pay for, you should assume it will not last.

As a content creator I paid money for soundcloud (for being able to offer more tracks than the introductory limit). I'm not only out a platform when they go under, I probably won't get that money back either.
posted by idiopath at 8:36 AM on February 12, 2016 [4 favorites]


Should have just used bandcamp.
posted by idiopath at 8:36 AM on February 12, 2016 [4 favorites]


Perhaps we can go back to having "your local radio stations" actually be owned and operated... you know, locally? Right now most of them are nothing more than a thin veneer of a few "local sounding" bumps on top of the same top-of-the-charts mixes that all the stations play. Maybe if you're really lucky, there'll be a "DJ" for an hour or two who'll play whatever requests aren't too offensive or too edgy or too far outside of the target sound that the company and the labels have identified that you should be hearing. They might even mention $LOCAL_SPORTING_EVENT so that you know they're really just like you! It might be the sassy-30-something woman who does that quirky morning show. Or the still-cool but 40-something-sounding guy who remembers how awesome that album was when it came out. Oooh, or maybe it's the younger guys who's hip to what the kids like these days (provided that it's a chart-topping song that the kids like).

This is why we got involved with CFRC, the oldest continuously operating community radio station in the world. We started out as volunteers (which obv, we still do to maintain our ability to have a show) and are now also programmers. It's the first time I've really seen the nuts and bolts of independent radio media. My husband has a very deep background in radio and is often very angry that all those commercial radio stations you hear on FM usually have nothing to do with the cities they're broadcasting in. Because, yeah, all Top 40 stations sound alike to me and I now know there is a reason for that. I would love to bring back locally owned and operated radio stations.

If anyone in Kingston wants to come out tonight to the Grad Club, I will be DJing an all-Pixies/Breeders/Frank Black set for a CFRC fundraiser. You're not gonna get that with Top 40 Radio.
posted by Kitteh at 8:45 AM on February 12, 2016 [16 favorites]


If there is a service that you use and like, but do not pay for, you should assume it will not last.

Well don't I feel like a chump now for springing for a pro-account... Do I get to keep the service if SoundCloud goes under since I actually did pay?
posted by saulgoodman at 8:47 AM on February 12, 2016 [5 favorites]


None of these services are losing money because of infrastructure costs.

What are they losing money on? Executive coke parties and hookers or what?
posted by saulgoodman at 8:49 AM on February 12, 2016 [2 favorites]


I'm not only out a platform when they go under, I probably won't get that money back either.

Do I get to keep the service if SoundCloud goes under since I actually did pay?

I thought about adding "and even if you do pay, that's no guarantee anymore".
posted by Rock Steady at 8:50 AM on February 12, 2016 [2 favorites]


I pay for a Pro account so I can use it as a host for my podcast feed. It will be a discomfort in the caboose if I must migrate all of my content (podcast feed, embedded players, etc) elsewhere. Not to mention the lost balance on the annual payment. Bah. There is not anybody who has time for that.
posted by Hot Pastrami! at 8:52 AM on February 12, 2016


Great news, creative people! On The Internet, the old business models will not work, but there will be new business models!

(Does 'give your stuff away for free until you go out of business' count as a new business model?)
posted by Sing Or Swim at 8:54 AM on February 12, 2016 [10 favorites]


What are they losing money on? Executive coke parties and hookers or what?

Payments to labels.
posted by GuyZero at 8:54 AM on February 12, 2016 [6 favorites]


What are they losing money on? Executive coke parties and hookers or what?

Yes but the parties are being held by the labels not the streaming services.
posted by Talez at 8:57 AM on February 12, 2016 [8 favorites]


MeFi music is not in this same boat, is it??
posted by infinitewindow at 8:57 AM on February 12, 2016


MeFi has a music subsite?
posted by Wolfdog at 9:00 AM on February 12, 2016 [3 favorites]


Dammit. I've been an off-and-on subscriber to soundcloud for posting my (terrible) music. I really thought it was going to be like Netflix; just there when I needed it and could send them some money in exchange for a quality service. It's the sweet spot between the free-for-all commons of YouTube and the overly-commercial Bandcamp.

I have no idea which one of those I'm going to end up using when Soundcloud folds.
posted by Xyanthilous P. Harrierstick at 9:00 AM on February 12, 2016


Bandcamp is overly commercial? I've thought the opposite - my understanding is that the artists control almost everything themselves, and pay for hosting services by giving bandcamp a small cut of what people pay for their music, if they ever choose to do so. Sure, bandcamp as a social network sucks, but I see that as keeping focused on just the music.
posted by rebent at 9:06 AM on February 12, 2016 [5 favorites]


I'd be very unhappy if Soundcloud went away, because I think they're the best single service for content creators out there. Bandcamp is a good, but distant, second.

I happily pay for a Pro account on Soundcloud and hope they just kill music on their site that's royalty-burdened. Turn it into purely a creator's platform.
posted by chimaera at 9:09 AM on February 12, 2016 [3 favorites]


Great news, creative people! On The Internet, the old business models will not work, but there will be new business models!

(Does 'give your stuff away for free until you go out of business' count as a new business model?)


The disruptors were so busy disrupting they didn't have time to come up with new models that work.
posted by Sangermaine at 9:12 AM on February 12, 2016 [7 favorites]


I have a SoundCloud account, and paid for a year once (mostly for the analytics, which sort of stink anyway), and I've used it occasionally to send playlists of demos when fishing for work, but it's pretty useless to me, otherwise. Frankly, I'm not sure what their business model was. It's certainly not a place I go to actually listen to music, commercial or otherwise.

Plus the over-the-top I'm-moving-to-Canada outcry when they started cracking down on works that infringe on copyrights should tell you everything you need to know about the user base.
posted by uncleozzy at 9:13 AM on February 12, 2016


Rebent: Bandcamp seems overly commercial to me, in the sense that it's explicitly about promoting and selling your music (and merch)... Which is not the place in music that I inhabit. Even offering my tracks at $0 / free-will-donation is more commercial than I'm interested in; as a producer of terrible music.

That's all.

I just want a place that I can post tracks and let people download them if they want, without all the bother of site design or web hosting services. If youtube had a "download" button it'd be perfect.
posted by Xyanthilous P. Harrierstick at 9:14 AM on February 12, 2016 [2 favorites]


1. I hope Bandcamp hangs in there. As an artist, I like their service A LOT.

2. Thank G*D for good old hard drives, and traditional web hosting.
posted by Devils Rancher at 9:16 AM on February 12, 2016


AS FORETOLD BY TERRIBLE PROPHECY, which you should all listen to now.

The Popstar and the Prophet
Nearly forty years ago, French polymath Jacques Attali wrote a book called "Noise" which predicted a "crisis of proliferation" for recorded music - in which its value would plummet. As music sales went into freefall at the turn of the century, his prediction seemed eerily resonant to up-and-coming singer/songwriter Sam York. Now struggling to earn a living as a musician, York visits Attali to help get an insight into his own future, learning that music itself may hold clues to what is about to happen in the wider world.

Along the way, York meets Al Doyle from Hot Chip and folk singer Frank Turner, who reveal that - despite being relatively well known - they still find it difficult to earn a living from their "stardom". Doyle says he struggled to afford a one-bedroom flat in London. It's a world away from the rock-and-roll lifestyle we might think successful musicians enjoy.
posted by boo_radley at 9:16 AM on February 12, 2016 [8 favorites]


Dammit! Soundcloud is awesome.

Bandcamp is still hale and hearty, right? Please don't tell me otherwise. (At least they have, you know, an obvious profit model.)
posted by escape from the potato planet at 9:16 AM on February 12, 2016


GuyZero: Tidal has never made money as far as I can tell.

TIDAL is a subscription-based streaming service. You have to pay to be a user, so they're not in as tight of a spot as other services, but even with 1 million users, it's status is in question (though that article from Oct. 2015 doesn't actually touch on the financial stability but focuses on the brand recognition).


Xyanthilous P. Harrierstick: If youtube had a "download" button it'd be perfect.

There are many work-arounds that provide just that. Here's a bunch of Firefox add-ons, for example.
posted by filthy light thief at 9:17 AM on February 12, 2016 [1 favorite]


With the company that owns Beatport going bankrupt, it's def interesting times in the music biz... as ever.

(Ironically listening to a youtube playlist at the mo)
posted by fearfulsymmetry at 9:18 AM on February 12, 2016


Were Soundcloud's main competitors really the streaming services? That's not what I saw it as at all. It's much more user-driven, a Youtube for music.

I suppose if Soundcloud fails we'll go back to Youtube being the Youtube for music, which sucks, because it sucks quite a lot in comparison with Soundcloud (for music).
posted by bonehead at 9:20 AM on February 12, 2016 [2 favorites]


boo_radley: Nearly forty years ago, French polymath Jacques Attali wrote a book called "Noise" which predicted a "crisis of proliferation" for recorded music - in which its value would plummet.

Question: is the value of music depreciated because there's so much of it, or because it can be obtained for free through so many channels? I'd like to see a historic graph of a poll where people are asked about how much music they listen to, and how much they have paid to hear that music (not including commercials on the radio, YouTube, Pandora or other streaming services).

(Ironically listening to a youtube playlist at the mo)

Exactly. Music doesn't want to be free - music is free.
posted by filthy light thief at 9:21 AM on February 12, 2016 [1 favorite]


Filthy Light Thief: sure, there are workarounds, but it's not baked into the UI, so it's offloading that labor onto the consumer.

With soundcloud, it's just a checkbox to allow downloads. Extremely elegant for the end user.
posted by Xyanthilous P. Harrierstick at 9:22 AM on February 12, 2016


The streaming services face a severe structural deficit. The labels charge more for popular music then they can monetize from subscribers and advertisers. This works fine for Apple, Google and Amazon, who can cross sell their album and track sales business, and cross promote other operations, and can shrug off what's left of the deficit. IHeart tells the labels what to do because they can trade access to their radio stations.

For a standalone internet music company with little or no track / album sales, all they have is the patience of their investors. My guess is that Facebook and Microsoft each buy one, but the rest go away.
posted by MattD at 9:23 AM on February 12, 2016 [3 favorites]


how much they have paid to hear that music (not including commercials on the radio, YouTube, Pandora or other streaming services).

If you count all of those out, then I pay zero dollars to listen to zero minutes of music.
posted by zempf at 9:27 AM on February 12, 2016


Youtube barely breaks even, at least according to comments by Google last year.
posted by bonehead at 9:27 AM on February 12, 2016


Now struggling to earn a living...

Sums up the life of pretty much everyone I know.
posted by freakazoid at 9:29 AM on February 12, 2016 [2 favorites]


Question: is the value of music depreciated because there's so much of it, or because it can be obtained for free through so many channels?

Back when I was a boy we had these things called "AM radio" and "FM radio" and you could listen to music for free all day long (as long as you listened to some commercials).

It was a lot of fun, there were thousands and thousands of radio stations around the world, the record labels made money, and usually so did the recording artists.
posted by My Dad at 9:32 AM on February 12, 2016


What we need is Ravelry for Music.
posted by Going To Maine at 9:34 AM on February 12, 2016 [4 favorites]


If youtube had a "download" button it'd be perfect.

I think my biggest complaint as an artist, and as a listener, is that Youtube, Pandora & Spotify all sound HORRIBLE because of low bit-rates.

We used to throw our worn-out cassettes away when they started to sound as bad a streaming music does today.

(Have not & will not listen to Apple Music because of so many SNAFUS on their part destroying people's actually-owned, on-my-hard-drive files -- iTunes is a dumpster full of paper & Apple Music is a barrel of gasoline from what I can tell)
posted by Devils Rancher at 9:34 AM on February 12, 2016 [3 favorites]


I saw this yesterday on HN and the discussion sorta mirrors this one: Soundcloud is really important to music creators and podcasters, it's a shame that it's getting drained by big media, we should really look into getting this sort of service paid for, etc. I really don't have an answer that doesn't include some form of ads-or-subscription model without getting into 'Unicorn Grove' with asking Android to include IPFS as a standard app on the next release.
This is why we need some form of public funding for a technological public good. We need a Corporation for Public Technology, like the Corporation for Public Broadcasting.
posted by eclectist at 9:36 AM on February 12, 2016 [4 favorites]


It was a lot of fun, there were thousands and thousands of radio stations around the world, the record labels made money, and usually so did the recording artists.

The problem is the ordering of those two pieces...
posted by Special Agent Dale Cooper at 9:36 AM on February 12, 2016 [3 favorites]


Back when I was a boy we had these things called "AM radio" and "FM radio" and you could listen to music for free all day long (as long as you listened to some commercials).

It was a lot of fun, there were thousands and thousands of radio stations around the world, the record labels made money, and usually so did the recording artists.


What's changed is that it's now free for the artists as well. Back in the day you needed access to recording equipment, storage, and a radio network. You could broadcast your own if you had the equipment but only very locally. It certainly wasn't free to the artists to have their music broadcast, especially at the national/international level.

Now those costs are gone. Any artist or band with access to a computer and the Internet can record music and make it available to everyone in the world. But as a result of this lowering of barriers, there is now a virtually infinite sea of music of every variety available for free to everybody.
posted by Sangermaine at 9:38 AM on February 12, 2016 [1 favorite]


eclectist: "We need a Corporation for Public Technology, like the Corporation for Public Broadcasting."

It's not exactly what you want here specifically, but Thank God for Archive.org.
posted by schmod at 9:38 AM on February 12, 2016 [4 favorites]


I mostly use Soundcloud to listen to singular DJ mixes that websites like FACT and FADER release. I'm sure bandcamp would be fine for "releasing" or hosting these, but they're typically on-offs and bandcamp seems primarily used by artists who want to host full albums and possibly make money from them. For example, Ryan Hemsworth has his FADER mix on soundcloud, but his albums on bandcamp. Idk why that's the way it is but that's the way it is and it'll suck when Soundcloud goes down. I know, I know, people can download the songs and put them on their phone! Except I (and many others) don't have a computer and not everyone owns an iPhone 6S that has 64 GB of space. I actually can't fit any music on my current phone, which makes streaming services like Soundcloud incredibly useful.
posted by gucci mane at 9:39 AM on February 12, 2016 [5 favorites]


A friend of mine is "Senior Manger, API" for Soundcloud (whatever that means). I'll have to ask him about this.
posted by josher71 at 9:42 AM on February 12, 2016 [1 favorite]


poll where people are asked about how much music they listen to, and how much they have paid to hear that music

do I get to count the almost hundred bucks a month I pay for basic internet service (two bills, two locations)? I imagine this goes for many/most of us. We are paying for the stuff we watch and listen to. But where is that money actually going?
posted by philip-random at 9:43 AM on February 12, 2016


I don't think I've ever downloaded a thing from SoundCloud, but I have purchased several things from Bandcamp. It's a great way to support projects, hope it's not following these other services off the cliff...
posted by fifteen schnitzengruben is my limit at 9:45 AM on February 12, 2016


A friend of mine is "Senior Manger, API" for Soundcloud (whatever that means). I'll have to ask him about this.

Some kind of barn, then?
posted by Going To Maine at 9:49 AM on February 12, 2016 [3 favorites]


Even offering my tracks at $0 / free-will-donation is more commercial than I'm interested in; as a producer of terrible music.

Pretty sure you don't even have to provide the option of donations on bandcamp? You can just set something as a free download with no pay-what-you-want.
posted by Dysk at 9:51 AM on February 12, 2016


A lot of the furry DJs I know and like post sets from cons or even just practice sessions to Soundcloud, and I download them and have them for offline use, and that is awesome. I will miss Soundcloud if it goes away.

I have also purchased quite a few albums over Bandcamp, and it has always been a good experience. I like that many artists put their full album up for preview, and I have a tendency to pay more than what the artist is asking for the album because I feel they are undervaluing themselves with their pricing. I love having that option available.

I don't see Bandcamp and Soundcloud as at all congruent services.

I will miss Soundcloud if it goes away.
posted by hippybear at 9:53 AM on February 12, 2016 [3 favorites]


We used to throw our worn-out cassettes away when they started to sound as bad a streaming music does today.

Have you...listened to a cassette recently?

is the value of music depreciated because there's so much of it, or because it can be obtained for free through so many channels?

Some of both, surely, but my gut tells me that the sheer glut of availability—free or otherwise—is the biggest factor. Back in the day, the only music we could acquire was the few hundred or so albums at the local chain store—or the ones we could tape from friends or the radio. (More if you were lucky enough to live in a city, with more / bigger / better / more specialized stores.) And if you were into anything outside of the mainstream, you had to hunt for it. Music had a certain scarcity.

Nowadays, though, we're flooded with media. The problem is no longer scarcity; it's to filter the firehose to separate the signal we're interested in from the deafening SHSHHHHSHSHHHHHH. Artists are no longer competing against a couple hundred current, major-label artists in a handful of popular genres—they're competing against a century of recorded music, from every style, era, and part of the globe. Not just competing financially—but also (and more fundamentally) competing for our attention.

Back in the day, if I found a particularly badass 12" at the local rave record store, I would have cherished and prized it. It might have been one of only a few thousand copies in existence. Nowadays, though, that same track would be posted on Soundcloud, instantly available to the entire world—with far less effort required to find it. And it still might be a badass track—but there are 1,000 other badass tracks waiting for me, already rated by other listeners and bubbled up to the front page for my convenience.

It's amazing and awesome that so much music is so immediately available to us these days. But I do often lament the old ways. It was a fundamentally different way of listening to music: it forced you to value any given piece of music a little more, to spend time with it and get to know it, to give it a chance to prove itself on repeat listens. Today, you could listen to a different Soundcloud mix every day and never listen to the same track twice, if you wanted to (and I know a guy who does exactly this).
posted by escape from the potato planet at 9:59 AM on February 12, 2016 [9 favorites]


The Soundcloud business model worked alright for musicians - it just didn't work very well for Soundcloud.
posted by atoxyl at 10:04 AM on February 12, 2016


Obligatory link to SoundButt.com. Although many of you will have already inadvertently visited it...
posted by straw at 10:05 AM on February 12, 2016 [2 favorites]


It was a fundamentally different way of listening to music: it forced you to value any given piece of music a little more, to spend time with it and get to know it, to give it a chance to prove itself on repeat listens.

This exactly. I was talking to a friend (We are both in our 50's, so we grew up with vinyl) about how when we were young, it was like you had a relationship with each record you had because compared with today, they were relatively scarce.
posted by freakazoid at 10:06 AM on February 12, 2016 [1 favorite]


Like for like, it's not even in the same ballpark.

Physical distribution is expensive.
posted by GuyZero at 10:06 AM on February 12, 2016


That is to say Soundcloud as a platform for getting your music heard. It was never much good for anything else.
posted by atoxyl at 10:06 AM on February 12, 2016


So no - I don't think you get to count but a tiny fraction of your internet bill as paying for the stuff we watch and listen to unless you're directly paying for it.

so raise the rate on the thing I am already directly paying for (and perhaps examine the magnitude of the cut that the internet providers are taking) ... and get more revenue to the creators of stuff. Way more.
posted by philip-random at 10:07 AM on February 12, 2016


Evolution of music sales
posted by 7segment at 10:08 AM on February 12, 2016 [1 favorite]


I just bought 10 records at Phonica. Granted they were very expensive, but I never have to worry about waking up and finding that their mobile interface is unusable garbage. Granted this is because they have no mobile interface, but still.

Mixcloud for DJ mixes. Bandcamp for independent releases. Beatport for labels. Soundcloud hasn't been a fun place to find new music for me for well over a year.
posted by 1adam12 at 10:08 AM on February 12, 2016


A lot of the furry DJs I know and like post sets from cons or even just practice sessions to Soundcloud, and I download them and have them for offline use, and that is awesome. I will miss Soundcloud if it goes away.

Mixcloud? I’m actually kind of surprised that it hasn’t come up yet, but most people here seem more interested in writing songs than making DJ Mixes.
posted by Going To Maine at 10:09 AM on February 12, 2016


So basically whatever music service you like, if it's not Apple, Spotify or Google, it's probably going to die soon.

Yep, and the labels don't mind this one bit. They've already strongarmed Soundcloud into giving them equity, and they're going to try to squeeze out every drop of goodwill remaining.
posted by RobotVoodooPower at 10:16 AM on February 12, 2016 [1 favorite]


- a robust taxation system that supports arts and culture above the breadline. Perhaps married to a guaranteed income for all parties. A big increase in grants and income security would mean more and better art.

also crowdfunding, but that tends to only really work with artists that have already made some kind of impact (ie: they are known quantities).
posted by philip-random at 10:18 AM on February 12, 2016


What are they losing money on? Executive coke parties and hookers or what?

You're actually pretty close. Most of their burn is spent on employees, either directly or through the leasing of nice office spaces filled with perks. Most of the rest is marketing spend, in an attempt to grow bigger than Spotify/etc. This is true of many online businesses, but SoundCloud stands out in a couple of ways.

According to that financial report, at the end of 2014 SoundCloud employed 288 people and maintained four offices in very expensive locations (NYC, San Francisco, Berlin and London). Their payroll costs for the year were €24.5 million (and growing, as the average number of employees in 2014 was 236 -- page 17). If you're earning €17M in top-line revenue (page 5) and trying to build a sustainable business, you're going to need to do it with fewer people and in fewer locations (and maybe don't hire 2-3 people per week, if you're looking for the best people).

The problem is, they're not trying to build a sustainable business. They're in "growth at all costs" mode, in an attempt to grow SoundCloud into "the market leading platform for listening to, creating, and sharing sound" (cite). The vast majority of flameouts come from trying to grow too fast, rather than missing out by not growing fast enough and getting leapfrogged. Ultimately, this is what's going to kill SoundCloud unless Amazon buys it at a discount first.

There's ample space for SoundCloud or a similar service to do what it does (artist-friendly distribution of sound files, with publisher-focused tools), but it's insane to think that it would be the leading place for listeners instead of a (potentially large) niche play aimed at musicians. The majors have already picked their winners (Apple, Spotify) for mass-market music distribution, and the idea that an independent that's mostly distributing user-generated content would compete on that level is insane. (See also: youtube, which barely breaks even, and wouldn't still exist outside of the Google umbrella).

The "rush to $1B valuation" and "grow to be the leader, no matter what it costs" is covered in the taint of Fred Wilson and Union Square Ventures (USV has been on the board of SoundCloud since 2011). Fred and other VCs like him can run a (highly) successful fund by having 1 in 10 companies produce blockbuster returns. He's a very, very savvy businessguy, with an obvious interest in having his portfolio companies attain stratospheric valuations -- It's easy to overlook the fact that the "advice" that he gives is wrong for the 90% of businesses who can be successful, but not at the $1B/three-comma level.

SoundCloud could probably earn the same €17M with 1/3-1/2 of its headcount and 1/4 of its office locations. It would be profitable. It would not be a $1B unicorn, and would return less to its investors. It would probably be more useful to its users as a $100M small/medium business -- but that would be at odds with what (most) of its board members/investors want.

By way of example: Bandcamp is 28 people, and is almost certainly a $100M business. They haven't sought investment since 2010.
posted by toxic at 10:22 AM on February 12, 2016 [29 favorites]


Going To Maine: Mixcloud?

Mixcloud doesn't offer a download option, and I like to have music for offline listening.
posted by hippybear at 10:25 AM on February 12, 2016


SoundCloud could probably earn the same €17M with 1/3-1/2 of its headcount and 1/4 of its office locations. It would be profitable. It would not be a $1B unicorn, and would return less to its investors. It would probably be more useful to its users as a $100M small/medium business -- but that would be at odds with what (most) of its board members/investors want.

+1000.

Labels are only Soundcloud's latest problem. toxic is right on - they're way to big in terms of employees relative to their revenue.

One of the reasons they have so many offices is that they started in Sweden but then moved to Berlin but they need offices in London and the US to do deals with record labels. But they could have a lot fewer people regardless.
posted by GuyZero at 10:26 AM on February 12, 2016


it's insane to think that it would be the leading place for listeners instead of a (potentially large) niche play aimed at musicians.

Completely agree. With its wave form location specific commenting feature, I always assumed they intended to target musicians--and in particular, musicians collaborating on projects remotely, since that UI feature is potentially very useful for making and sharing notes on a mix in progress. When they rolled out the newer, slicker version of the site a little while back, I remember being disappointed that it seemed to feel a lot more like a music streaming service, less focused on the ways I wanted to use it (sharing original tunes on social media and collaborating with others on mixes behind the scenes)...
posted by saulgoodman at 10:35 AM on February 12, 2016 [1 favorite]


Going To Maine: Mixcloud?

Mixcloud doesn't offer a download option, and I like to have music for offline listening.

Let me point you at this truly wonderful little command line tool: youtube-dl
posted by Going To Maine at 10:36 AM on February 12, 2016 [3 favorites]


when we were young, it was like you had a relationship with each record you had because compared with today, they were relatively scarce.

I have a cardboard box full of old CDs. Every few months, I think "I should get rid of everything except for the truly rare and exceptional stuff; it's just taking up space". So I pull it out, and flip through it...

...and I just can't do it. It would feel a little bit like putting an old pet down. I have history with those objects, man. I never, ever listen to them anymore—most of them are on YouTube or Spotify anyway—but each one is a symbol or trophy of some adventure, some era, some friend or lover, some place or time or state of mind. I could take each of those CDs in turn and tell you the story behind each one, and it would be as good a way as any to tell the story of my life (the part of it that happened during the CD era, anyway). And I am not, by and large, a sentimental person.

For better or for worse, you can't develop that kind of relationship with a Soundcloud URL.
posted by escape from the potato planet at 10:37 AM on February 12, 2016 [10 favorites]


do I get to count the almost hundred bucks a month I pay for basic internet service (two bills, two locations)? I imagine this goes for many/most of us. We are paying for the stuff we watch and listen to

No. If you pay a toll driving to a restaurant, it is a cost you incur in the process of getting a meal but it doesn't pay for the food you consume or the labor to prepare and serve it.

And simply raising the tolls and having road owners be in charge of distributing money to waiters and farmers isn't a good solution.

Unfortunately, not paying for things if you can get away with it is the new reality, so we're left with no good solutions, short of universal income passing and artists being free to give away their work without fear of starving.
posted by Candleman at 10:40 AM on February 12, 2016 [4 favorites]


I have a cardboard box full of old CDs. Every few months, I think "I should get rid of everything except for the truly rare and exceptional stuff; it's just taking up space". So I pull it out, and flip through it...

The thought that I have when I glance over at my wall of dusty CD's (all carefully alphabetized by artist & sub-filed by release chronology) is that I'm not going to wake up one day and find all the jewel cases empty because a CEO flipped a switch.
posted by Devils Rancher at 10:59 AM on February 12, 2016 [7 favorites]


Gah, that would be a terrible shame! (And yes, I pay - here's my stuff...)

But unfortunately, delivering music on the net is a natural monopoly field. Eventually it'll be a tiny number of very big companies which will deliver very tiny amounts of money to a vast field of artists and large amounts of money to a tiny number of big artists.
posted by lupus_yonderboy at 11:02 AM on February 12, 2016


Unfortunately, not paying for things if you can get away with it is the new reality, so we're left with no good solutions, short of universal income passing and artists being free to give away their work without fear of starving.

This is a bit fatalistic. As noted elsewhere in the thread, Bandcamp is doing swimmingly. And as touched on in both the article and the thread, soundcloud is blowing its fat stacks on lots of programmers and perks. Soundcloud might die, but there's surely room for some sort of community oriented, service for talented amateurs to share their material. And if people don’t want to either have ads or pay for things, well, then, they don’t really want those things or they need to come up with a new way for the system to work.
posted by Going To Maine at 11:03 AM on February 12, 2016


And simply raising the tolls and having road owners be in charge of distributing money to waiters and farmers isn't a good solution.

why not?

it is a cost you incur in the process of getting a meal but it doesn't pay for the food you consume or the labor to prepare and serve it.

Again, why not? You got me on the way into town. my reason for going into town is buy some nice things.

Unfortunately, not paying for things if you can get away with it is the new reality,

So, like I said, get me on the way into town.

I realize that this logic unleashes a hornets nest of middlemen and related complications, but that's business, is it not?

Alternately, it could be as scittore put it up thread:

One bill that absolves you of worrying about whether artists are getting paid could be done another way - a robust taxation system that supports arts and culture above the breadline. Perhaps married to a guaranteed income for all parties. A big increase in grants and income security would mean more and better art.
posted by philip-random at 11:11 AM on February 12, 2016


The concept of toll roads which have restaurants along them who offer free food because you are paying for using them with your tolls for using the road is a vision from a society that doesn't exist in this universe but which is worthy of contemplating.

It's like a factoid from a late 60s Robert Silverberg novel.
posted by hippybear at 11:13 AM on February 12, 2016 [2 favorites]


It's hardly impossible, but it would also require more of a consumption-based pricing model, and we seem kind of against that too. Not sure why, but there it is.
posted by Going To Maine at 11:28 AM on February 12, 2016


For better or for worse, you can't develop that kind of relationship with a Soundcloud URL.

I don't know. Nostalgia is one hell of a drug - sometimes, I reminisce about old sites I used to visit, like when MP3.com hosted the Quest for Glory V music files by Chance Thomas, and others. As media becomes more digital, I think this is even more likely to happen with future generations.
posted by lmfsilva at 11:51 AM on February 12, 2016 [2 favorites]


The worst thing about streaming/hosting services without a download option is once the service is gone (and there is nothing in the historical record of capitalism to lead us to believe that any service is going to be around forever), whatever it was hosting is also gone. Period.
posted by hippybear at 11:57 AM on February 12, 2016


Oh man, a lot of EVE Online history will die when soundcloud shuts down. At least the singing will probably be exported and saved elsewhere. (EVE Online has a history of fans singing parody songs with fairly high production values.)
posted by ryanrs at 12:48 PM on February 12, 2016 [1 favorite]


In other online music news, the best private bittorrent music site on the net and spiritual successor to Oink just announced their 1 millionth album.
posted by ryanrs at 1:12 PM on February 12, 2016 [3 favorites]


(EVE Online has a history of fans singing parody songs with fairly high production values.)

wut
posted by josher71 at 1:12 PM on February 12, 2016




It feels a little like this article is trying to make a somewhat standard VC-funded business trajectory sound particularly dire and frightening.
The company expects to operate in the red for several more years as it negotiates licensing deals and invests further in its platform.

In the financial report, the company’s board of directors concluded “they have expectation that [SoundCloud] will have the adequate resources to continue its operational existence for the foreseeable future.” However, the directors also concluded that “there are material uncertainties facing the business.”
So everything is going according to plan? SoundCloud, like most VC-funded businesses, is currently not profitable, expects not to be profitable for several years, expects to be able to continue operating for several more years, and also there are "material uncertainties facing the business"--Before I read this article, that is pretty much what I would have expected was the current state of SoundCloud.

Music is definitely a very difficult business, and if SoundCloud is really trying to use advertising as a significant source of revenue then my hunch is that they will fail (audio ads have bad CPMS because they don't work well and I don't think they've been proven by anyone to be a viable business model; display ads on audio are not easy to target effectively), but I'm not sure this article says anything particularly new.
posted by jjwiseman at 2:31 PM on February 12, 2016 [1 favorite]


Spotify bitrates are fine. As are Pandora if you allow the better streams option.

If they take away Apple Music and/or Spotify, I'm mounting the fucking barricades. I can't tell you how much utility I get out of music streaming services.
posted by persona au gratin at 2:32 PM on February 12, 2016


audio ads have bad CPMS because they don't work well and I don't think they've been proven by anyone to be a viable business model

When Google abandons an advertising format, you know there are problems.
posted by GuyZero at 2:33 PM on February 12, 2016


On the other hand, iHeartMedia sells about $3B of audio ads a year, so I guess you can make it work at scale.
posted by GuyZero at 2:36 PM on February 12, 2016


Whoa, $3B! I had no idea. I guess that just because Google doesn't find something worth doing doesn't mean it can't still be a whole industry unto itself that other companies do find to be profitable enough.
posted by jjwiseman at 2:48 PM on February 12, 2016


I feel a lot for the Soundcloud folks. Not the investors & execs—or whatever company owns them now—but the ground-level folks 'in the trenches' in the Berlin offices, many of whom I know. Behind the scenes, they have been fighting insane battles with the major recording labels around copyright infringement, and this has meant the introduction of a whole system of automated copyright-monitoring that increasingly alienates the customer base they worked so hard to attract. And the worst part is that the front-line employees know this (many of the people they drink / party / !@#$ with are producers and DJs) and are well aware of how the user-focused elements of the service are being eroded away under pressure from rent-seeking corporations with a great deal of legal power. I really hope they pull through and find some way to get back afloat, but I get the impression that they're in for more trouble…
posted by LMGM at 3:49 PM on February 12, 2016 [2 favorites]


Soundcloud is one of the better places to just listen to music, especially music that can't be found on Apple/Google/Spotify because reasons. It's also a lot better at community and subculture discovery than Big Streaming. I'll be sad if it sinks beneath the waves.

If Bandcamp ever goes belly up, though, I'm setting the whole fucking music industry on FIRE.
posted by chrominance at 4:15 PM on February 12, 2016 [2 favorites]


this has meant the introduction of a whole system of automated copyright-monitoring that increasingly alienates the customer base they worked so hard to attract

Seems like SoundCloud caters largely to a dance / electronic crowd (although maybe that's just the artists I follow).

So it's interesting to compare this to the mixtape system that thrived in the underground electronic scene in the 90s. Probably 2/3 of the music I listened to back then was mixtapes—purchased from merch tables at events, record stores, or some mail-order thing in the back of a zine. Sometimes the tapes were quasi-officially being sold on behalf of the DJ who mixed them; sometimes they were obviously (and undisguisedly) just second- or third- or fourth-generation copies. At any rate, the original artists whose songs were featured on them certainly weren't getting paid.

I never heard any suggestion, let alone complaint, that this was shortchanging anyone: it was just an accepted part of the larger distribution model. Mixtapes were seen as promotion for the DJs (who wanted to win fans and get booked for gigs). And much of the music was only commercially available on vinyl anyway, so the tapes weren't cutting into the actual label's sales (people don't really buy 12" singles for casual listening—DJs are the ones who buy vinyl). Indeed, an amateur DJ who heard a great cut on another DJ's mixtape might want to buy his or her own copy. So mixtapes were (free!) promotion for the labels, too.

(Professionally produced mix CDs were a different story; it was assumed that anything professionally manufactured and marketed had secured proper rights.)

Point is, this notion—that copyright and royalties don't apply to tracks that are used in DJ mixes—has been part of electronic music culture for a long time. At least in my day, it was never considered piracy by anyone involved. It was just how things worked.

Obviously, the law has a different take. And due to technological changes (e.g., a shift away from vinyl for DJing), there's no longer any significant insulation between the DJ market and the ordinary-listener market.

But listening to a mix by a talented DJ, who has a deep knowledge of the music and spends hours finding the best new stuff, remains one of the best ways to discover new music. It would be a shame if that got lawyered out of existence.
posted by escape from the potato planet at 6:32 PM on February 12, 2016 [2 favorites]


why not?

Just because you're heading downtown and it makes sense for you to grab dinner on the way doesn't mean it makes sense for everyone. My father will never download digital music and would fight tooth and nail against having his internet bill go up to subsidize your music collection. The technically adept generation would fight it because they'd rather just torrent it. A chunk of the Christian right would fight it because they don't want "their" money going to Satanists.

You're proposing a solution to a problem that doesn't really exist, because right now there's a variety of options to people's digital music desires at a variety of pricepoints and feature sets. People hate cable bundling with a passion and the future is moving towards more individual choice, not less.

I would totally support a good, basic income program in the United States for a number of reasons including supporting arts, but I'm not holding my breath for it any time soon.
posted by Candleman at 9:28 PM on February 12, 2016 [1 favorite]


Looking at my Soundcloud page just now, one thing that's quite rarely mentioned is how many of the interactions on there are bots of one kind or another. This is par for the course on Twitter, of course, and still extant on Facebook (less so these days, admittedly), and it's easy to see how it's come to happen on Soundcloud, but that aspect of the service always seems to degrade it for me, somehow.
posted by Grangousier at 2:51 AM on February 17, 2016


Another fatality in the streaming audio (online) world: Drip.fm (a letter from the founders of Drip, via Medium)

Fuck, I really liked what those folks were doing -- let fans pay labels and artists directly, monthly, and get something new and fresh (or pulled from the archives) throughout each month. Time to do some serious backing up of my accounts there.
posted by filthy light thief at 12:52 PM on February 18, 2016


Aw, no! I loved the idea of Drip. On the other hand, I never wanted to pay for it.
posted by Going To Maine at 11:24 PM on February 18, 2016


« Older Diving Below the Ice   |   Save the fucking Curzon Newer »


This thread has been archived and is closed to new comments