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?

The Irish Times - Friday - The Ticket - - NEWS - Shilpa Gana­tra

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

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