Soundcloud Needs to Start Paying Its Users
But it shouldn’t do it the conventional way.
SoundCloud has the potential to start giving something back to it’s users, but to do so would mean large, radical changes to the platform.
SoundCloud is one of the largest audio distribution platforms and also one of the highest ranked websites in terms of web traffic (residing around the 100 mark). With 40 million registered users, the amount of music and audio distributed within the website is substantial, however what SoundCloud is doing with this is minimal at best. Indeed in 2013, the company made a relatively small revenue, and even made a loss that year.
In two years it has come a long way, introducing monetisation for large and recognised names, which has helped it a lot. Unfortunately, however, this is not enough. It needs to do more. There is so much more that it can do. And it can do so with minimal advertising.
The YouTube Model
YouTube has been steadily increasing its earnings throughout the years, pushing it’s revenue into the billions. That’s a lot more than what SoundCloud ever got. Other than being the largest video (and subsequently audio) platform on the internet, it has been able to give something SoundCloud could never do: earn it’s users money. All the adds on youtube that appear before the video, or as a banner, or on the side of the page, go to earning YouTube and it’s users money.
This has worked very well, enabling it’s more prominent users to earn a living from their earnings, as well as those with a decent size following to earn a good chunk of money. The great thing about YouTube, as well as SoundCloud, is that it allows it’s users to upload anything within it’s Terms and Conditions restrictions, without the need to go through the bureaucratic process of getting a recording label, certain copyright selling codes. All this is needed for selling content on services such as iTunes or streaming and can be a nightmare for smaller, independent artists. Youtube is a great platform for these people, however for those who just want to stream their music on an audio only and less cluttered platform, SoundCloud should be the way to go.
The Problem of Advertising
Unfortunately, the YouTube model, for SoundCloud, could be devastating for users. As a user myself, the idea of listening to a 15 second audio ad before actually listening to what I wanted to listen to is quite unappealing. SoundCloud might be able to pull off the ‘skip ad’ aspect YouTube does somewhat successfully, however it still runs the risk of the listener skipping to someone else’s work without an audio ad.
Of course, users could pay a little extra to see those advertisements disappear, which would integrate nicely into the Pro and Pro Unlimited subscription services it currently offers. This, by itself, is a good idea but for the pinchpenny or just casual users, the introduction of annoying audio ads similar to what Spotify does will bring a whole host of new problems. Indeed, just searching ‘Spotify Ads’ will bring up a slew of threads, hacks and articles all detailing their distain for ads and how to get rid of them.
How else would SoundCloud pay it’s users then? Users should have the option to monetise their content, but without ruining the whole experience for those who don’t. This is where a possible solutions.
Tiered Advertising
This is SoundCloud’s possible solution. Give the users the option to monetise their content at different levels, which depend both on the user’s following base as well as their play count.
Tier 1 — Banner Advertisements
Sounds crazy right? A visual ad on an audio-only distribution platform. It might very well be, but moderate to heavy users like me will know, we spend a lot of time looking at, commenting, liking and sharing certain tracks. This means that we see a lot as well as hear a lot. Banner adds might not be such a bad idea, displaying a banner ad, similar to YouTube’s, over the visual representation of the audio track, with the option of closing or clicking on it. These types of ads would be limited to users that can average over 1,000 plays per month, as anything less would result in a minimal amount of revenue. Indeed, YouTubers average less than $10 per 1000 views on their videos, so those who make a living off of the platform need to get a lot of views, I’m talking in the millions per month at the least.
It would be easy to close the banner ad too, just press the X button that would appear on the side. Now I’m no professional at photoshop so unfortunately what you’re going to see is only a very rough markup. Take this composition, as shown below:
A banner advertisement would appear over the top of it as shown below:
This advertisement would only appear when you start to play the music, and would subsequently disappear when the piece was finished. This advertisement, especially with the current design is SoundCloud, is quite ugly to say the least, but this is only a rough concept. Perhaps if SoundCloud were redesigned, and advertisement placed in obvious but discreet locations, it would be a lot more effective and appealing. You can check out how SoundCloud can be redesigned here:
Tier 2—Audio Advertisements
SoundCloud is actually experimenting with this for big labels and Premier Partners. Audio advertisements are played before a track, however this is very unappealing and certainly when I encountered it, startling. Perhaps a better way is to play advertisement after the end of a certain composition. It would be limited to a 15 second audio clip, or 30 seconds if the piece is upwards of 10 minutes in length.
Tier 3—Payed Advertisement
Users would have the option, similar to FaceBook, to design and display their own banner advertisements. This would appear something like this:
A user would have the option to pay SoundCloud for a custom designed banner advertisement for their profile, playlist or a particular composition to appear on someone else’s. This could boost the number of clicks onto their profile, as well a their plays and everything else involved. Of course, SoundCloud would have to take a cut of the revenue, otherwise it would become very uneconomical very quickly.
Unfortunately, people really, really do not like ads. They can be intruding, annoying and ruin the overall experience. Plus, there’s no denying that many people avoid ads with AdBlock or something similar. But ads are effective. They bring in a lot of revenue and are simply the best and easiest way to give content creators something back. Similar to Spotify, though, users should have the option to pay a little extra per month to not see or hear all advertisements, it’s only fair.
Going Radical
Website Support
There aren’t too many other ways for a service to gain a lot of revenue, and those ways that are are way, way out there. If SoundCloud were to adopt this, it would not be a music platform anymore, it would be more of a multi-service website.
When viewing the profiles of many users, at least 20% from my own experience, they have a little link displayed underneath their description that when clicked on, takes them to their own website. My question is, why can’t SoundCloud do this? It is certainly feasible for them, especially if they acquire a site building platform like squarespace.com, which is absolutely gorgeous.
Users would have the option to build their own website supported by SoundCloud, which would also allow for direct integration of their music. Plus, a website like this allows people to sell their own music, without the need of recording labels, official stamps and all that bureaucratic nonsense (well, not quite nonsense but for the sake of argument) that can be a hard and long process for small independent artists to acquire. If artists were able to sell their music on SoundCloud directly (or almost directly), this could be one of SoundCloud’s best new attractors for new users, as well as keeping the old ones active.
Of course, paying the users can be a long and hard process, but one that can be solved quite radically, detailed in this article:
Direct Sales Integration
Another direction is to do away with website support and just allow users to purchase music, whose price would be determined by the creator. I would certainly use it, to buy a composition or to that I am particularly fond of. Of course a user would have the option (and most likely default option) to have users unable to purchase their music.
The only problem with this is that there are several sites were you are able to directly download music from SoundCloud, at no expense. This is something SoundCloud would have to deal with, but I have faith that there are enough honest users to provide some artists with a small stream of revenue. SoundCloud here would also take a small cut.
All Together Now
So what if they were to implement all of this, and more? Well, then SoundCloud wouldn’t be SoundCloud any more. It would be complicated, over the top and unruly for almost all present users. Trust me, I don’t want SoundCloud to go down the Facebook path of introducing all these unneccesary and at times ridiculous features that just draw away from the overall experience. I want SoundCloud to be like it is now, but with just a little bit more.
So what path, if any, should it take? I am personally quite fond of the banner and paid banner advertisements myself, as well as direct custom website support (go figure!). If SoundCloud introduced these features very slowly, methodically without shocking it’s users, then it has a very bright future ahead of it, one that I hope I can be a part of as an active user.
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I an active independent composer who writes music mostly for myself. If anyone is interested, you can check out my music here on SoundCloud.
