These SoundCloud statistics on mobile explain Twitter’s big investment
By Abhinav Agrawal
In June of 2016, Twitter announced a $70M investment in SoundCloud as part of a $100M round that valued the company at north of $700M. Why did Twitter make an investment in the music space? Was SoundCloud the best opportunity? How can Twitter leverage SoundCloud’s user base and vice versa?
We used SurveyMonkey Intelligence to explore the SoundCloud statistics on mobile that made the company such an an attractive investment for Twitter.
SoundCloud gives Twitter a strong position in the music app category (with a caveat)
The SoundCloud app is one of the top 10 Music apps (excludes Apple Music which is installed by default) and the largest one after Shazam that isn’t owned by a public company or competitor to Twitter. With approximately 10% penetration in the US across iOS and Android smartphones, SoundCloud is a formidable player in the music app space.
Most of the music companies are large standalone companies with the exception of Google (Youtube Music) and Amazon (Amazon Prime music). With this investment, Twitter has a foothold on mobile with a player that is larger than both of YouTube Music and Prime Music in terms of monthly active users. SoundCloud with its user generated content is also a better fit for Twitter which is also based on user generated content versus players who focus on professional label licensed content.
One note of caution is that the SoundCloud app seems to have weaker metrics relative to the competition on engagement and retention. As an example, SoundCloud is used on average ~2.9 days per week while Spotify is much higher at ~3.4 days per week.
Do these strong SoundCloud statistics point to a new avenue to growth for Twitter?
So, there are a substantial amount of SoundCloud app users; users who produce and consume user-generated data. So far, the SoundCloud audience seems like a good fit for Twitter. If we dig a little deeper, is there something that makes this investment particularly appealing to Twitter?
SurveyMonkey Intelligence indicates that far fewer SoundCloud users use Twitter than Facebook or Snapchat (only ~35% versus 75% for the other social networks) indicating a significant growth opportunity. Tight feature integrations (like social logins powered by Twitter), cross-promotions, and other techniques could usher a new, large audience into the Twitter growth funnel.
Similarly, only a small percentage (<15%) of Twitter’s user base uses SoundCloud(much lower than the ~40% that uses Spotify). Twitter could thus provide an interesting growth opportunity for SoundCloud especially in promoting the service’s unique user generated content on Twitter.
With SoundCloud, Twitter has invested in a strong foothold in the mobile music app landscape. The next twelve months will be critical in evaluating the wisdom of this deal. The key success criteria is whether the investment can accelerate growth and product collaboration between the two companies.
This post originally appeared on June 27, 2016 on the blog of SurveyMonkey Intelligence, a competitive intelligence product for mobile apps.