Has Sound cloud Go missed a beat?
The music app likes to think of itself as a service for musicians – so why is it following the herd on artists’ fees?
Speaking on BBC World when Soundcloud Go was launched in the UK and Ireland earlier this week, the streaming platform’s CEO and co-founder Alexander Ljung was quick to justify the company’s late entry into the music-subscription market. Every single person in the world likes music, he pointed out. There’s room in the market for multiple services.
As lucrative as its 175 million listeners may appear, you’d need a weighty proposition to get them paying and/or skim Spotify’s 30 million subscribers, Apple Music’s 11m or Tidal’s 3m – especially if you’re relying on it to save a business that’s racked up losses of ¤74.7m between 2012-4.
Available for the industry standard of ¤9.99 a month, Soundcloud Go’s main USP is the ability to combine its existing service – comprised of free, artist-uploaded tracks, mainly of newer acts and remixes (the ones that haven’t been taken off for copyright infringement at least), with a new, major label back catalogue akin to its competitors. It results in 125 million tracks available on and offline from 12 million creators, though the artists who’ve opted out of streaming services – such as Taylor Swift, Adele and the late, great Prince (let’s take another moment to pay respect; and now we must continue) still won’t be present on our apps.
Which brings us to another salient point: is this yet another streaming site that pays its artists next to nothing? Seemingly so.
While its free service will give their partnered artists a share of ad revenue – similar to YouTube – the premium service will be ad-free with a pay-per-play fee instead.
When The Ticket asked the Berlin-based company for details of artists’ fees, the company declined to answer, in favour of a standard press release in which Alexander Ljung outlined his commitment to creators, stating: “It’s through this monetisation of the platform, which also includes the introduction of ads to the free service, that we will eventually enable them all to be paid for the work they share with the world.”
The quote suggests two things. First, creators who aren’t on their invite-only partner list will get a raw deal: they’re not set up to earn revenue, so subscribers can now download their existing Soundcloud catalogue but the artist won’t earn a penny from it.
Second, the silence suggests fees for partnered artists will be similar to the other platforms, so unlikely to put bread on the table for newer artists, given that a ¤1 loaf typically needs 1,045 song plays on Spotify, 885 on Apple Music or 164 on artist-friendly Tidal (and that’s before a label takes its slice).
Arguably, SoundCloud Go has a missed trick by ignoring this known pain point, as Tidal’s solution of passing the cost on to the consumer wasn’t well-received, and Soundcloud still sells itself as a service for musicians by musicians.
While an increased share for artists may have dug into their profit margin in the short term, there’s every likelihood that a fair price for music fans, coupled with a fair deal for artists, would have won them serious ground in the crowded music-subscription market. Instead, it may well prove that this business model is too little, too late.
Alexander Ljung, co-founder and CEO of SoundCloud