Emergency Funding Saves Music Platform
The popular music streaming platform, SoundCloud, has had a tough few years leading up to a tough summer. At it’s inception in 2007 it was a kind of underground streaming service that gave virility to new, emerging artists. Specifically, the EDM and rap music genre. The listener base grew exponentially over its initial years – from 11 million in 2011 and then skyrocketing to 175 million in 2015. This growth brought in huge investor backing and at it’s peak was valued at $700 million. Today there are 88 million active users.
In 2012 the introduction of a reposting feature was its first indication of decline though. Artists began reposting their own music so much it became a form of spam and the abuse of the feature turned off users. With this misuse came a string of other issues that caused the once authentic streaming and play service to be replaced by bought popularity – i.e. paying for plays and fake followers and fans. Soundcloud didn’t properly get a grasp on this issue which caused backlash in the community and continued spam accounts.
Another hit was the introduction of Spotify in the U.S. around 2012. The popularity of the streaming service came crashing down on SoundCloud and highlighted everything they were lacking. The organization, multiple platforms, pay system, clarity, and major labels and artists contributed to SoundCloud’s confusing and inept structure. They simply could not compete. But at it’s core SoundCloud exists for the artist and it’s goal is to give a platform for the artist to reach as many listeners as possible. Popular electronic producer, Jai Wolf told The Verge that, “My song ‘Like It’s Over’ has almost 1 million plays on the non-monetized upload and 24,000 on the monetized one. It’s all so strange and messy. I don’t care about royalties off SoundCloud because it’s almost negligible” (Newton, Dani Deahl and Casey. “How SoundCloud’s Broken Business Model Drove Artists Away.” The Verge, The Verge, 21 July 2017).
Source: The Independent.
Despite all the setbacks though, which also included a massive 40% layoff last month and closing the London and San Francisco offices, SoundCloud cleared the funding round that will keep them streaming. This came from a rearranging of roles and emergency funding. Founder and CEO, Alexander Ljung took a step down and added top players from Vimeo, Kerry Trainor and Michael Weissman (CEO and COO), stepped in. Allegedly the funding amounts to $170 million and was backed by Raine Group of New York and Singapore’s sovereign wealth fund Temasek (Reuter’s). For now, SoundCloud remains above water.
Top
