SoundCloud as a Streaming Service

SoundCloud was formed in 2007 by Alex Ljung. Ljung started the platform to allow anyone to upload, record, promote, and share originally created sounds across the web. Ljung originally planned on becoming a sound engineer, and after landing a job at a post-production studio after high school, he enrolled in college to study human-computer interaction. Eventually, Ljung partnered up with another student and future SoundCloud co-founder, Erick Walhforss. Together they worked on projects together, both school related and extra-curricular, and one day they realized what they needed to do. “‘We were working on stuff and…suddenly realized something was missing and…we just had to do it. It wasn’t a choice or anything…A startup…became the vehicle we chose to actually do the thing we wanted to do. We wanted sound to be something different on the web’” (Hansen). The pair launched SoundCloud with a “vision of un-muting the future” (Hansen).

SoundCloud offers a unique platform for individual artists to release music on. The concept is very simple, create music and upload it to the site. From there, anyone on the site can search and listen to the music created by other users. There are some aspects of the site that make it stand out from other streaming services. The biggest one is the layout. SoundCloud acts like a social media site as well as a streaming service. The ability to follow artists and individuals is not unique when that function is available on Spotify other services, but being able to like, repost, and comment on song posted to SoundCloud makes it feel more like a community rather than strictly a streaming service.

SoundCloud offers a plethora of statistics for their users to utilize. For each track a user uploads, SoundCloud will keep track of how many likes, comments, reposts, downloads, and plays that track accumulates. The user is also able to view all of their stats on one page so that they can see their total plays, likes, comments, reposts, downloads, and followers all at once. SoundCloud also keeps tracks of statistics for songs that people found elsewhere on the web, as long as the song was shared or embedded through SoundCloud. So, if someone shares another user’s track on Facebook, SoundCloud will keep track of how many plays and likes that song gets even though it is not being listened to on SoundCloud directly.

SoundCloud offers three tiers of usage. The first level is their free version. This allows users to upload a total of 3 hours of content to the website. It also counts the amount of plays, likes, comments, and downloads those tracks receive. The free version does not allow quiet mode, which is a feature that lets the user disable comments and keep track stats private, nor does it allow the user to use spotlight, which is a feature allowing users to pin tracks and playlists to the top of their page. The second level is SoundCloud Pro which costs $7 a month or $63 a year, allowing the user to save $21. This version allows a user to upload a total of 6 hours of content, and keeps track of all the same stats as the free version, plus it allows users to see who is playing their tracks and in what countries they are most popular. SoundCloud Pro offers both quiet mode and the spotlight feature. The final version is SoundCloud Unlimited which costs $15 a month or $135 a year, allowing users to save $45. This version allows users to upload an unlimited amount of content, and has all of the same features as SoundCloud Pro, but also keeps track of what pages, apps, and social networks a user’s tracks are being played on. Like SoundCloud Pro, Unlimited also offers quiet mode and the spotlight feature.

As of now SoundCloud only offers monetization of plays through SoundCloud Premier. Premier is a version of SoundCloud that partners with labels and independent artists to monetize artists’ music. SoundCloud uses ad revenue from users who use the free version, and revenue from SoundCloud Pro and Unlimited subscribers to payout artists. Right now, there is currently a waitlist for artists to become partnered with SoundCloud Premier.

SoundCloud is different from other streaming services in the sense that a majority of their content is uploaded by individual artists trying to make a name for themselves, but in what other ways are other streaming services similar or different from SoundCloud? Most people would agree that the main streaming services are Spotify and Apple Music. These two services seem to cater to a majority of music listeners, but Amazon Music and Tidal are starting to force their way into the industry.

Spotify is probably the most popular music streaming service available. Spotify offers two versions of their service, a free model that includes ads between songs, and a premium version which $10 a month and does not have ads. The premium version also allows users to download songs to their library for access when they are without Wi-Fi or data. With a catalogue of more than 30 million songs, curated playlists, and exclusive content such as live sessions Spotify makes a case for being one of the top streaming services.

Apple Music competes with Spotify price wise by offering their services for $10 a month, but only offers a free trial for 3 months before users must start paying. Apple Music offers 40 million titles and has exclusive content from artists such as Taylor Swift and curated radio stations and playlists. Like Spotify, Apple Music allows its users to download music onto their phone for access when they do not have service, but Apple Music will also sync music from a user’s iTunes library with their iTunes Match feature.

Amazon Music is Amazon’s version of a music streaming app. They offer different services depending on whether the user pays for Amazon Prime, and also based on the level of the service the user wants to receive. Prime Music is their first level and is free for Prime members and costs $99 a year for non-members. Amazon Music Unlimited costs $8 a month or $80 a year for Prime members or $10 a month for non-members. The first tier only offers about 2 million songs, while the second tier offers a larger library of over 10 million songs as well as curated playlists and stations.

Tidal is a streaming service that has tried to gain users by offering exclusive albums such as Life of Pablo by Kanye to only their users. They also advertise that they offer Hi-Res audio to their users who pay for the higher level of service. Tidal offers a one month free trial and then requires at least a $10 a month payment for their basic service, and $20 a month for their Hi-Res option. They have a library of 40 million songs, and offer 130,000 music videos to their users.

The difference between these services and SoundCloud is that SoundCloud offers a community environment for independent, no-name artists to share their music with each other. There are a lot of big artists such as Chance the Rapper and large electronic artists like Griz and Big Gigantic who got started on SoundCloud and still upload their music to SoundCloud. But users who are looking for a service to listen to their favorite artists will not find SoundCloud useful. That does not mean that it is not a popular service, or that people who use Spotify or Apple Music will not like it, because there is a lot of interesting music from a lot of creative artists for people to discover on SoundCloud. SoundCloud is great to follow friends on and see what they repost and what artists they are following, and it is great for up and coming artists to get their music out there, because there is still a large audience using SoundCloud who appreciate new and creative music.

This generation of music lovers listen to music in many ways. There are so many options to stream music and many people utilize more than one. In a focus group of ten young adults, ranging from the age of 19 to 24, the questions asked were used to figure out what streaming services are most popular and if young adults pay for their music. When asked if they pay for a streaming service eight out of the ten interviewees responded yes. Of those eight all of them paid for Spotify, and one of them paid for both Spotify and SoundCloud. The interviewees were then asked what services they streamed from most frequently, and were told they could select more than one. Of the eight that pay for a service four of them just listen to Spotify; two of them listen to Spotify and SoundCloud, but only pays for Spotify; one of them listens to Spotify, Bandcamp, and YouTube, but only pays for Spotify; and one of them listens to Spotify and SoundCloud, and pays for both of those services. Of the two that do not pay for a streaming service one listens to just YouTube, and the other listens to Spotify, Pandora, and YouTube. The below graphs represent the data found during the focus group.

The group was then asked if they purchase physical copies of music and out of the ten interviewees six said no and four said yes. The next question is an interesting one. The question asked the group if they buy merchandise from bands and artists to support them and out of the ten, seven said yes and three said no. This is interesting because this generation grew up during the prime age of pirating music. Some are old enough to have used LimeWire and the rest are old enough to have known about other pirating sites. The fact that, even though most of the group pays for a streaming service, they still buy merchandise to support artists is comforting.

As expected, the most popular streaming service in the focus group was Spotify, but surprisingly SoundCloud came in second for both paying users and most frequently streamed. The 8:2 ration of paying to non-paying users was an expected stat. these days it is very hard to find a young adult who is willing to put up with constant ads while listening to music. This generation in general is used to on demand everything, whether it is music, television, or food, everything is expected to be available upon request. The expected results from the focus group were that a majority of the interviewees would pay for a streaming service, and that service would most likely be Spotify, in fact, it was thought that Spotify would be the only service to be paid for. However, one member of the group paid for both Spotify and SoundCloud which was surprising. What was even more surprising was that behind Spotify, SoundCloud and YouTube tied for second for the most frequently used services. YouTube was expected to come in second in that category just due to the fact that there is such easy access to it and everyone has heard of it, but SoundCloud is not full of mainstream music that is easily accessible. Every now and then it is possible to find the original track to a song, but for the most part the music posted on SoundCloud is going to be remixes, covers, and independent artists’ original content. The fact that SoundCloud has somewhat consistent following shows promise for the future of independent music.

In conclusion, SoundCloud is a great site for artists who want to share their music with others and interact with other artists and music lovers. Unlike Spotify or Apple Music, which are primarily for users who want to listen to big name artists, SoundCloud connects up and coming artists in the electronic, hip-hop, indie, and other communities and helps build followings for them. In the article, Why SoundCloud Will Be Worth More Than Spotify published on by Alex Moazed, the future of SoundCloud and Spotify is discussed. One analogy Moazed makes is that SoundCloud is the YouTube of Music and Spotify is the Netflix. “…this analogy makes a lot of sense. Just like Netflix, creatives don’t build their own following on Spotify. Instead, they get famous on SoundCloud, just as the best users do on YouTube” (Moazed). The artist Fetty Wap is a perfect example. Fetty became hugely popular on SoundCloud before he dominated the carts. DJs such as Diplo and Skrillex also started on SoundCloud and they now headline festivals across the world.

SoundCloud is not a glamorous, money making streaming service that users will find Taylor Swift or Jay-Z posting on. It’s a site for the little guy to stake their claim and build their way to getting noticed. The most notable thing about SoundCloud is that many of the artists are not looking for money. They want their fans to hear their music and have a way of accessing their music for free. SoundCloud has come a long way since it started back in 2007, but Alex Ljung and Erick Walhforss have achieved their vision of un-muting the future, and then some.

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