Reportedly, one of the world’s most celebrated independent music streaming platforms, SoundCloud, is going to shut down soon. It has been in the news from almost a year but the chances of survival for SoundCloud are diminishing. As a result, independent musicians are feeling insecure now. To breakdown every aspect of this news, we decided to do this write-up for you. Here’s everything that you need to know.
What Is SoundCloud?
First and foremost, SoundCloud describes themselves as “SoundCloud is a music and podcast streaming platform that lets you listen to millions of songs from around the world, or upload your own”. However, there are very few people who don’t know about it. SoundCloud is a Berlin, Germany-based company which permits their users to do pretty much everything in terms of marketing their music.
SoundCloud initially started of as a record sharing platform but soon became a music distribution company. Users are enabled to distribute their music in exchange of a subscription fee which provides different services to the user. As of their last update, they had 40 million registered users and 175 million monthly unique listeners. Unfortunately, Alexander Ljung and Eric Wahlforss’ company is probably in its last stage of survival.
What Did Actually Happen To SoundCloud?
Music distribution giant, SoundCloud‘s advantage pulled them down. As a matter of fact, the ‘open to all’ platform became a liability for the owners. Other major music streaming platforms like iTunes and Spotify verifies the music before uploading to their platform. As a result, they get the access to monetize the product they’re distributing. On the other hand, since SoundCloud was open to all, music was hard to monetize.
Aspiring users were uploading their music by using samples (sections from other recordings) in their recordings. As a result, copyright infringements and non-profit use of music was barring SoundCloud ‘s growth. Based on the stats provided above, 40 million users were actually subscribed to SoundCloud. On the other hand, a majority of 175 million unique listeners were not being monetized. That’s where the problem kicked in.
The Deal Between Spotify And SoundCloud
SoundCloud saw the terror coming closer, as a result, they approached Spotify. Spotify being an established company, took interest in acquiring SoundCloud. They denied the deal several times in two years but reconsidered it again and again. In December 2016, Spotify finally took their hands-off from the deal and denied the offer. Spotify went cold by saying “We don’t need an additional licensing headache in a potential IPO year.”
Spotify was probably the last hope for SoundCloud as they didn’t approach anyone else in the span of two years. On going search for a buyer is reportedly resulting in the consumption of funds.
SoundCloud’s Infamous “All-Hands Conference”
According to Techcrunch, the streaming company laid-off 40% (173) of their employees out of the blue. A majority laid-off employees were newly appointed and a few of them hadn’t even joined SoundCloud yet. Employees from around the globe left their jobs to join SoundCloud at their Berlin HQ. All-hands video conference came out as a shock to the world. Techcrunch‘s sources said that SoundCloud has done this to save some funds that will help them till the fourth quarter of this year. “With more focus and a need to think about the long term, comes tough decisions” Ljung said.
SoundCloud responded to news and said there are a lot of inaccuracies in the article. The statement released by SoundCloud suggests: “To clarify, SoundCloud is fully funded into the fourth quarter. We continue to be confident the changes made last week put us on our path to profitability and ensure SoundCloud’s long-term viability.
In terms of layoffs, it is our policy not to discuss individual employee cases, but we can share we continue to work with all employees who were let go to support them during this transition, with employment and financial assistance.” Read the full statement here.
What Is The Conclusion?
Musicians worldwide are stopping their music uploads on music streaming platforms like SoundCloud. Artists like Russ made their career out of SoundCloud but there is no promising future left on the platform. Reports are suggesting that SoundCloud is denying the claims to prevent their financial position from coming out. It could affect their chances of finding a buyer. Quarter four is around the corner and if the statement holds any truth, SoundCloud’s end is near.
Hip-Hop community will be directly affected globally as the streaming platform has always been the hub for aspiring hip-hop artists. Artists who can’t invest on the distribution of their music use the free services provided by the former. Other giants in the business might celebrate but trust us, it is going to be tragic. Chance The Rapper suggested that he is working to save the streaming platform already. He tweeted:
I’m working on the SoundCloud thing
— Lil Chano From 79th (@chancetherapper) July 13, 2017
How important do you think SoundCloud is for the music industry? Let us know.