If SoundCloud Launched a Subscription Service, Would Anybody Pay?

SoundCloud's Plush Manhattan Office Space

SoundCloud’s Plush Manhattan Office Space

SoundCloud has been too free for too long, according to some observers.

Now that a deal with Sony Music Entertainment is in hand, SoundCloud appears to be rapidly accelerating its move towards a subscription (ie, paid) tier.  In fact, SoundCloud’s much-anticipated subscription service may launch within a matter of weeks, not months.

It’s unclear exactly when the launch timetable was altered.  In the wake of an earlier deal with Universal Music Group in January, sources pointed Digital Music News to a roadmap to launch a full-blown subscription service by this summer, with insiders expected the actual launch to happen by fall.  That was a reaction to pressures from UMG, though Sony has proven a more demanding holdout and may have pushed for the accelerated subscription launch.

Either way, SoundCloud is now making this a top priority, and hoping that users pay the piper.  Just last week, one source to Digital Music News pointed to an initial subscription launch in ‘April or May,’ though details on what will be included in the launch remain scant.  Today, Billboard also pointed to a subscription launch ‘in the coming weeks,’ though details on what will be included in the service were also light.

The Billboard report also noted that major labels Sony Music Entertainment, Universal Music Group, and Warner Music Group will pick-and-choose which songs will be free and which will be paid.  But exactly how that alters the overall SoundCloud experience remains unanswered, though critical.

The huge schedule-shift is uncertain news for artists, especially DJs with million of followers.  This is probably going to be a difficult transition, with DJ support already complicated by a warzone of takedowns and destroyed accounts.  Just this week, Morgan Page found his entire account deleted for posting a promo clip with unlicensed work, the latest in a string of abrupt teardowns.  That has cooled relationships between artists, labels, and SoundCloud, and the specter of a subscription service dictated by major label demands is unlikely to improve morale.

But the biggest question is this: will users pay?  And if so, how many?

At last count, SoundCloud reported 175 million active users, though most of those users are accustomed to a completely free experience.  On top of that, more serious fans are probably already subscribed to a paid platform like Spotify, Tidal or Apple Music, not to mention already buying higher-end items like vinyl records.

 

SoundCloud could be playing a game for scraps.

12 Responses

  1. GGG

    SC grew on the backs of DJs/remixers/etc. That’s why it’s as big as it is. Now that they’ve been cracking down on copyright infractions and canceling accounts, I predict they’re dead in the next couple years.

    Reply
  2. Nicky Knight

    There’s a few issues here… Firstly it’s not only DJ’s that use it, but independent artists too who have their own original music on the platform.

    The difficulty with going into the paid streaming space is that it’s starting to get a bit crowded.. there may only be room for a couple of winners out of all of this..

    Just like search engines ..

    The dedicated music streaming services really only has two key/popular players
    Spotify and Apple Music.

    Does Tidal count?

    If you going to fork out ten bucks a month for music streaming then you want one that gives the most..
    Consumers are unlikely to want multiple paid subscriptions to a bunch of different streaming services, so it’s a case of where’s the best deal with the most comprehensive choice of music.

    Music streaming is different from the paid video content streaming business because the paid video streamers carry unique content so as to lift their value to the consumer and to differentiate themselves in the market.

    Music streaming providers generally carry much the same content ..
    Apple Music has some content that isn’t available on Spotify
    and this is at the discretion of certain labels and artists.

    SoundCloud may have unique content from independent artists
    whose material is not available on Apple and Spotify.

    Is there a plan to go public with an IPO?

    Interesting read
    https://en.wikipedia.org/wiki/SoundCloud

    Reply
    • GGG

      I never said it was only them. I said it was built on the backs of them, and continues to flourish largely because of them. I’m not saying SC is wrong in taking down uncleared samples and other copyright flags, just that it was a safe haven for people who posted that type of music. Without them it will tank.

      Yes, indie acts will use it. I do all the time to share tracks privately with pubs, A&R, etc.

      But I can also do that through Bandcamp, which has just as many indie artists, if not more.

      Also, based on my experience working with both DJs/electropop acts and indie rock acts, I can get 10k plays on a DJ set in about 1/10th the amount of time it would take to get 10K plays on a rock song.

      One indie rock act I work with has almost 500K streams on Spotify across one album. That same album on SC, which was how 2 singles were premiered before the album even dropped, has about 6k plays across the album. Nobody is looking for indie rock on Soundcloud.

      Reply
    • THP (The Hargett Project)

      Thank you, thank you, thank you for posting this. You speak my mind.
      As a paid SoundCloud member, I use it to distribute my music. What appeals to me is the broad base of users that I can connect with. I was a DJ so I understand their concerns but as an artist, I want to feel like I have a vehicle to reach people who are serious about finding new music.

      Reply
  3. Nicky Knight

    Interesting article Paul..

    There’s a few issues here… Firstly it’s not only DJ’s/ReMixers that use it,
    but independent artists too who have their own original music on the platform.
    This may be an important factor with it’s future.

    The difficulty with going into the paid streaming space is that it’s starting to get a bit crowded.. there may only be room for a couple of winners out of all of this..

    Just like search engines ..

    The dedicated music streaming services really only has two key/popular players
    Spotify and Apple Music.

    Does Tidal count?

    Consumers are unlikely to want multiple paid subscriptions to a bunch of different streaming services, so it’s a case of where’s the best deal with the most comprehensive choice of music.

    Music streaming is different from the paid video content streaming business because the paid video streamers carry unique content so as to lift their value to the consumer and to differentiate themselves in the market.

    Music streaming providers generally carry much the same content ..
    Apple Music has some content that isn’t available on Spotify
    and this is at the discretion of certain labels and artists.

    Interesting reading:
    https://en.wikipedia.org/wiki/SoundCloud

    Reply
  4. Jamie

    I like SC as a user who plays guitar and uses it to post practice and test tracks. I already get music from amazon prime so dont see payong a subscription. I would pay SC for some advanced audio editing tools or some kind od music productin and collaboration tools. I might pay for access to original music by non commercial artisys.
    I really hope SC eorks it out as I like the intuitive interface.

    BTW that is some office lobby! Will take a lot of $10 per mnth accounts to cover that. Maybe tone that down a bit ?

    Reply
  5. Anonymous

    So people are going to have to pay to listen to songs artists upload and don’t get paid for?

    Reply
  6. Bob Jones

    A bigger question is, now that they are a subscription service, have they lost their safe harbor defense on all the infringing works not covered by the label deals?

    Reply

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