Will SoundCloud’s final ‘GO’ prove a hit with consumers, saving them from bankruptcy. Or will its premium price cut end up as a notable yet failed Hail Mary pass?
You work for a largely respected company. You’ve even received the title of “YouTube of Audio.” Millions of relatively-unknown DJs have successfully used your service to share their tracks. Artists like Chance the Rapper have praised you for boosting them up. You sport 175 million monthly active users.
To capitalize on your popularity, you offer a $10/month premium service to convert your users into paying subscribers. Yet, very few have subscribed.
Then, Spotify walks away from advanced acquisition talks. The Swedish company believes you’ll most likely delay its IPO plans. Google also doesn’t want you. Then, your COO and finance director jump ship.
Now, you must face the cold hard truth. If your premium service doesn’t take off, by the end of the year, your company won’t have money.
Welcome to SoundCloud.
After mounting pressure to remain afloat, SoundCloud introduced a new, mid-tier premium service plan. In its press release, the streamer stated that it will introduce a $5/month Go starting today. The premium $10/month service will still exist, this time rebranded as Go+. The move was done to offer music lovers “more choice in how they experience [the service.]”
In a statement, Alison Moore, Chief Revenue Officer, said,
“SoundCloud Go answers the call from our users who want the ability to take the huge catalog of content found in SoundCloud’s free, ad-supported offering with them anytime, anywhere, without interruptions, at a very affordable price. And at the same time, we’re now giving users who haven’t made the jump into a music subscription plan, a robust, fully on-demand option at an accessible price.”
Alex Ljung, company co-founder and CEO, added,
“SoundCloud offers the largest, most diverse mix of established and emerging artists, all in one place. Now with three ways to experience SoundCloud: SoundCloud’s free, ad-supported offering, SoundCloud Go and SoundCloud Go+, users have even more freedom to choose the features and content they want, at the price that fits their budget.”
So, what exactly changes between it’s $10/month Go+ and $5/month Go? Honestly, not much. Go+ has unlimited listening to 150 million tracks as well as unlimited track previews. Go only has access to 120 million songs and 30 second track previews. Mid-tier paid subscribers will also have to listen to occasional messages asking them upgrade to Go+.
Yet, the large question looming over Soundcloud is: will its $5 mid-tier plan work? Despite access to over 120 million songs, the mid-tier service won’t break any new ground. Both Pandora and Amazon have offered lower-priced options. Both companies have also completely unlocked features for low-paying subscribers. Pandora also emerged as 2016’s most-streamed service. Amazon Prime Music also led streaming in the American household.
So what will SoundCloud offer to entice music lovers away from these two premium services (and Spotify, Apple Music, etc)?
Mid-tier SoundCloud paid subscribers will still have access to millions of songs. Yet, they may find themselves locked out of popular songs by popular artists. Should either of its Go plans fail to take off, Alex Ljung’s statement may (unfortunately) prove true.