OP-ED: SoundCloud Go Is Proof SoundCloud Is Playing The Wrong Game

…and losing.

Music 
283 Hypes 0 Comments

The long-awaited SoundCloud subscription service, SoundCloud Go, launched early last week to modest fanfare. For those who missed it, here are the details: $9.99 per month gets you offline and adless streaming of every track on Soundcloud plus newly uploaded libraries from labels with which Soundcloud has licensing deals. Seeing as how SoundCloud finally inked a deal with Sony Music last month, this means all three major labels plus 20,000 more under the Merlin umbrella. A representative I talked to from SoundCloud refused to break down exactly how many new tracks would be added to their library, but the recent amount of 30-second previews I’ve run into while browsing around indicates it will be a substantial. But SoundCloud is brand new to the subscription streaming market. It’s naive to think The Beatles will appear on the SoundCloud charts anytime soon, and the fragmented market of streaming right now means SoundCloud is unlikely to consolidate market share by just offering major label content. Every one of its competitors offers something more, from high audio quality to premium content, to entice users. So SoundCloud is destined to be playing catch up to rivals like Spotify, who has better relationships with major labels, and Apple Music, who has better relationships with artists and can out-compete for exclusive content from popular artists. What sets SoundCloud apart is their user base that continuously puts out quality exclusive content, and yet Soundcloud has no plan to monetize their biggest asset other than offering Go users offline streaming of it for $9.99 per month. Soundcloud is contorting itself to fit the mold of a streaming platform, when in reality it’s an entirely different service.

And it’s unclear who SoundCloud is hoping will jump aboard SoundCloud Go. Competitors’ users? The relatively high price point and lack of premium content suggest this won’t be the case. Existing users? The preponderance of 30-second previews seems to be designed to entice Soundclouders to fork over $9.99 per month for access, except for the fact that many of them already have accounts with their competitors who are offering more or less the same content. The average Soundcloud user doesn’t use the service to browse mainstream content they can get elsewhere, just as the average Youtube user doesn’t use the service to watch full-length movies and T.V. shows. The target market for SoundCloud Go thus seems to be only those who want offline access to the SoundCloud Library.

When I asked the rep from SoundCloud if the company had plans to start premiering exclusive content in a similar fashion to Tidal or Apple, she pointed me towards the vast library of user-produced content on the platform that was “already exclusive.” I was reminded of a similar media streaming platform that also recently launched a $9.99 subscription service: YouTube. YouTube began running ads on videos hosted on its site in 2007. It launched a partner program similar to SoundCloud’s On SoundCloud program in which selected users could earn a share of the ad revenue their videos earned. The YouTube Partner program started small and exclusive but grew over the years to the point where it’s relatively easy for the average user to start earning money from ads run on their videos. It is only nine years later, with subscription-based video streaming revenue set to outpace ad-based revenue by 2020, that Youtube is making a foray into the subscription service territory occupied by Hulu, Netflix, and Amazon; albeit with mixed results.

The similarity between the YouTube and SoundCloud platforms – majority of content produced by independent creators, exclusive host of a large library of media, infrastructure that creates a sense of community among users – make the differences in how each goes about generating revenue all the more surprising. Soundcloud expects its users to sign up for Go to get the same content they already have with their Spotify/Tidal/Apple accounts. The fact that they are seeking to change their service to make them more similar to their competition, while failing to innovate a way to earn revenue on what makes them unique, makes Go bound to fail. What SoundCloud has never realized is that by playing by other people’s rules (in this case rules set by the major labels and their competition), they’ll never outcompete the dominant streaming platforms. SoundCloud should focus on expanding On SoundCloud to generate a revenue stream from their millions of users. In a fragmented streaming market in which it no longer makes sense to subscribe to just one platform, each platform needs a way to distinguish itself. Yet SoundCloud seems intent on modeling itself after its competitors while neglecting the user base that made it what it is today.

SoundCloud’s attempt to stay afloat thus boils down to offering a product that a) it has no prior experience offering and b) is virtually indistinguishable from what its competitors have been offering for years. At the same time, SoundCloud is neglecting what makes its service unique: the millions of user-generated tracks that it hosts almost exclusively. Failing to expand its efforts to monetize this library of tracks and instead choosing to fit itself into the streaming service box defined by its competitors displays a galling lack of innovation, and is one of the reasons the service has yet to break even. It will only be so long before someone else figures out how to create a platform in which user generated audio content and ad revenue can live symbiotically the way Youtube has done for video.

Read Full Article

What to Read Next

'Pokémon GO' Fest Is Back for 2021 In Celebration of the Game's Fifth Anniversary
Gaming

'Pokémon GO' Fest Is Back for 2021 In Celebration of the Game's Fifth Anniversary

No word yet on whether it’ll be completely virtual.

For $65, It’s Hard to Go Wrong With the Nike GTS
Footwear

For $65, It’s Hard to Go Wrong With the Nike GTS

A no-frills canvas sneaker from the ’90s that’s cheap, versatile and classic is returning.

Broadway is Getting Its Own 'Game of Thrones' Prequel Play
Entertainment

Broadway is Getting Its Own 'Game of Thrones' Prequel Play

Ned Stark and Jaime and Tyrion Lannister are set to return.


Insta360's GO 2 Is the World's Smallest Action Cam
Tech

Insta360's GO 2 Is the World's Smallest Action Cam

Weighing just 26.5 grams, or roughly the size of an Airpods Pro case.

The First Trailer for 'Rogue One: A Star Wars Story' Is Here
Entertainment

The First Trailer for 'Rogue One: A Star Wars Story' Is Here

The ‘Star Wars’ spin-off is coming to theaters this December.

Make Your Own Multicolor Kobe 11s With NIKEiD
Footwear

Make Your Own Multicolor Kobe 11s With NIKEiD

In beautiful gradient Flyknit.

NEIGHBORHOOD x Porter 2016 Spring/Summer Capsule Collection
Fashion

NEIGHBORHOOD x Porter 2016 Spring/Summer Capsule Collection

Your favorite bag brand just got a little cooler.

Examining the Yeezy Boost's Impact on the Resale Market
Footwear

Examining the Yeezy Boost's Impact on the Resale Market

The Kanye effect is real.

Nike Drops the Flyknit Racer in "Indigo"
Footwear

Nike Drops the Flyknit Racer in "Indigo"

The runner is back by popular demand.


Iron Chef Masaharu Morimoto Opens New Ramen Joint in New York City
Food & Beverage

Iron Chef Masaharu Morimoto Opens New Ramen Joint in New York City

Serving all types of pork in hearty, rich broths.

SOPHNET. Unveils Warm Weather Essentials for Its Latest Release
Fashion

SOPHNET. Unveils Warm Weather Essentials for Its Latest Release

The label has got you covered for Spring.

You Can Now Play PS4 Games on Your Mac
Tech

You Can Now Play PS4 Games on Your Mac

Game-changer.

Kevin Lyons & HUF Pay Homage to Iconic Skate Spots NYC, SF and LA
Fashion

Kevin Lyons & HUF Pay Homage to Iconic Skate Spots NYC, SF and LA

A fitting union.

Tinashe Postpones Tour to Finish Album
Music 

Tinashe Postpones Tour to Finish Album

“Due to unexpected recording commitments I need to postpone my upcoming international tour. “

More ▾
 
Subscribe to our Newsletter

Gain access to exclusive interviews with industry creatives, think pieces, trend forecasts, guides and more.

By subscribing, you agree to our Terms of Use and Privacy Policy.

Adblock Detected.

We charge advertisers instead of our readers. If you enjoy our content, please add us to your adblocker's whitelist. We'd really appreciated it.