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.
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.
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
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.
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?
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.
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 :)