Why Soundcloud will Stay Underground

In my Class Presentation – I discussed the cool social aspects of Soundcloud.  At the end someone asked me how Soundcloud Go, their new paid streaming service, will affect Soundcloud’s business.  I wanted to address that with this blog post.

soundcloud-go-preview

Last Month Soundcloud released its own paid streaming service “Soundcloud Go”.  But before we talk about Soundcloud Go, let’s talk about streaming.

THE STREAMING BUSINESS

The music streaming business is pretty messy.  Spotify, Tidal, Apple Music, Pandora, and dozens of other services have emerged in the last few years, all trying to gain a piece of the increasingly profitable pie of streaming music.  The problem is that in a highly competitive market with so many players, no single company is truly dominating.  Each company has their advantages and small victories (for example: Tidal exclusively premiering Kanye and Beyonce) but the problem is that music listeners are signing up for too many services simultaneously, and there is no clear winner.

streaming-music-logos

SOUNDCLOUD GO

Soundcloud is mainly known for free streaming, and a catalogue of music you can’t find anywhere else.  This “underground” and “independent” aspect of Soundcloud has existed because any artist can upload music for free.  For this reason there are 125 Million songs on Soundcloud, compared to about 30 million on Spotify.

Another reason Soundcloud has been “underground” is because artists own their profiles and major record labels have not been involved… Until now.  The major labels (Universal, Sony, and Warner) have cut deals with soundcloud to create a real paid streaming service, and now control all of their artists Profiles.

Soundcloud Go wants users to pay $9.99 a month for:

  • More tracks: 125 million+
  • Listen offline
  • Unlock previews as full tracks
  • Ad-free

My belief is that people will NOT want to pay for Soundcloud GO, and Soundcloud is actually alienating its existing userbase.  Here are a few reasons why.

PREVIEW MODE

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On platforms like Spotify and Youtube, users who use the free version can still listen to full songs, but they have to listen to ads.  On Soundcloud’s new free version, listeners can only listen to 30 second song previews of any artist signed to a major label.  This alienates its existing users, and hurts major label artists who have built a career on free streaming on Soundcloud.

Skizzy Mars, for example, is an artist who has the majority of his fanbase on Soundcloud.  His fans have listened to his music absolutely for free on Soundcloud for 3 years.  Because he is signed to a major label, now his fans can only listen to 30 second previews, if they don’t want to pay.  This alienates free users, who soundcloud could still monetize from with ads.

LACK OF BIG NAME ARTISTS

Many big name artists such as Lady Gaga and Justin Bieber simply do not have music on Soundcloud.  Why would someone pay for Soundcloud Go if some of the biggest artists they listen to are not available on there?

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THEY STARTED TOO LATE

Let’s be real – Spotify, Apple Music, and every other streaming service have a serious head start on paid streaming and Soundcloud GO just does not have enough benefits for users to switch.  Again – The claimed benefits of Soundcloud Go are:

1. No ads.
2. Offline listening
3. Millions more songs than other services

Benefits 1 and 2 are already had on other Streaming services.  Benefit 3 is the only truly unique benefit.  The problem with this is that those ‘millions more songs’ are from Soundcloud users who are not signed to major Record Labels, and those songs can be accessed for free anyways.  As I said before, anyone can upload music to Soundcloud for free, and that is how the ‘underground’ community started in the first place.

CONCLUDING STATEMENT

In my eyes, there just are no real benefits of paying for Soundcloud Go when you can already access every major label artist on other Streaming services, and the Underground artists are already free to listen to without Soundcloud Go.

Would love to hear the class’s thoughts :)

-Willy B

 

 

 

5 comments

  1. Thank you will, this soundcloud Go issue has really been bothering me. I agree, soundcloud go will not be as successful a streaming service. I think what soundcloud has is different from the other music services, so they should do something different. They should get rid of the streaming aspect, make the membership fee very small, and get rid of the adds that make noise. I dont care about pop-ups, but making sound bothers me so much. I use soundcloud mainly for the songs that only exist/get posted there- the remixes and indie artist, they should focus on what they do best.

  2. I like how you framed this blog post by giving your reasons why Soundcloud Go will not be as successful as other music subscription services. For me personally, I am already invested in Spotify’s paid streaming service and the switching costs of making new playlists are not worth it for me to use any other platform. If Soundcloud had moved earlier, then there is a possibility they could’ve dominated the streaming industry because of the immense amount of music they offer compared to other services. Another reason why this might be unsuccessful is due to customer dissatisfaction in figuring out how to use the features of the service. I’ve heard that for some reason it is difficult to search for entire albums by an artist, which is frustrating. I do agree that Soundcloud should stick to its points of differentiation, and focus on what it does best. With so much competition in the streaming industry, I think Soundcloud has the ability to stand out with the variety of music they offer for free by new and unknown artists.

  3. You’ve certainly raised excellent points about Soundcloud’s value proposition for its users relative to other streaming services. I think the argument needs just a little more substance, but I agree with you completely. Why pay for Soundcloud Go when you pay the same price already for Spotify? But also, how could Soundcloud monetize its unique value? Charge those listeners of smaller independent artists? It’s quite a tough situation for a great company that fosters not just listening, but sharing and creativity. Can’t wait to see how it plays out. Cheers!

  4. I agree with your post. I do think this is a very bad move for soundcloud. Such a move could spell great danger for soundcloud considering how many other music streaming apps are out there. I don’t think any move by a music streaming service is more stupid than Tidal strategy of making people pay more in exchange for nothing, but this might come pretty close.

  5. SoundCloud has always been known as an app that’s for the people first. When I saw the Soundcloud Go option offered, I knew that it was not a good idea. The app has never been known as one that was a music streaming service, but as a platform where artists can easily distribute their tracks to the public. Trying to join late to the party won’t prove to be worthwhile also. If I’m already using a music streaming service and fully satisfied, what makes you think I would switch over to Soundcloud Go? Especially when not too much positivity is associated with the service. Great post Will.

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