|Type of business||Privately held company|
Type of site
|Social networking service, music website|
Alexander Ljung (Founder & CEO)|
Eric Wahlforss (Founder & CTO),
David Noël (VP Community & Evangelist)
|Alexa rank||124 (November 2016)|
|Registration||Required to post and upload content|
|Users||40 million registered users (July 2013), 175 million unique monthly listeners (Dec. 2014)|
SoundCloud is a global online audio distribution platform based in Berlin, Germany, that enables its users to upload, record, promote, and share their originally-created sounds. SoundCloud's content is evenly split between music and other audio. Founders Alexander Ljung and Eric Wahlforss are the chief executive officer (CEO) and chief technical officer (CTO), respectively.
SoundCloud was originally founded in Stockholm, Sweden, but was established in Berlin in August 2007 by Swedish sound designer Ljung and Swedish artist Wahlforss. The founders initially aspired to allow musicians to share recordings with each other, but the concept later transformed into a full publishing tool that also allowed musicians to distribute their music tracks.
A few months after inception, SoundCloud began to challenge the dominance of Myspace as a platform for musicians to distribute their music by allowing recording artists to interact more nimbly with their fans.
In a 2009 interview with Wired, Ljung said:
“ We both came from backgrounds connected to music, and it was just really, really annoying for us to collaborate with people on music—I mean simple collaboration, just sending tracks to other people in a private setting, getting some feedback from them, and having a conversation about that piece of music. In the same way that we’d be using Flickr for our photos, and Vimeo for our videos, we didn't have that kind of platform for our music. ”
In January 2011, it was confirmed that SoundCloud had raised a US$10 million Series B funding round from Union Square Ventures and Index Ventures. On 15 June 2011, SoundCloud announced they had five million registered users, as well as investments from Ashton Kutcher and Guy Oseary's A-Grade Fund.
On 23 January 2012, SoundCloud announced on their blog that they had reached 10 million registered users. A story wheel was created for the occasion, which can be found on the SoundCloud blog. By May 2012, 15 million users were announced by the company at a press conference held in San Francisco, US, where the next version of the site was previewed. The usage level for the site was growing by 1.5 million users per month at this stage.
At the start of December 2012, the new SoundCloud version was released to the general public. Heavily influenced by the tablet browsing experience and mobile devices, the enhanced platform offered new features such as: redesigned profiles; more sharing options; real-time notifications; continuous play, which allows concurrent listening and site navigation; the ability to create personal collections/sets; and the addition of real-time indexing to search. The response from users was mixed, and many expressed dissatisfaction with the change. SoundCloud received over 60,000 comments regarding the new layout by 10 December 2012. Also in December 2012, the company's data showed that SoundCloud was reaching 180 million people per month—8 percent of the global Internet—while users were uploading 10 hours of content every minute.
In March 2013, Twitter announced SoundCloud as a third-party music partner, alongside iTunes, in developing the Twitter's first-ever integrated music app. However, the initiative never eventuated; SoundCloud's inability to load licensed music—due to the absence of arrangements with the major music labels—was cited as a major reason. By July 2013, SoundCloud's registered users had quadrupled in number from the beginning of the previous year, with a total of 40 million, and an additional 20 million listeners were using the service on a monthly basis.
SoundCloud announced in January 2014 that it had commenced negotiations with the major music companies, as copyrighted material consistently appeared on the platform. The announcement was publicised after a round of funding in which US$60 million was raised, resulting in a $700 million valuation. The additional finances were suggested as the reason for the plan, as finalising such deals is a costly process.
In March 2014, SoundCloud was reportedly in a second round of talks with major music labels about licensing after the January negotiations did not amount to anything substantial. According to media sources, the negotiation process was initiated in an attempt to avoid the problems faced by Google, which is forced to handle a large number of takedown notices on its YouTube video-sharing platform. However, the outcome of the talks was not forthcoming in any media sources.
Later in May, the media reported that Twitter had regained interest in SoundCloud and was considering acquiring the platform for around US$2 billion. The next after the publicity of the deal surfaced, the prospect was no longer an active consideration. One media report stated that "the numbers didn't add up", while Bobby Owsinski claimed on the Forbes website in July that SoundCloud's ongoing inability to secure deals with the major music labels was the foremost culprit.
On 28 September 2016, Spotify announced that they are currently in talks to buy SoundCloud.
Monetization, subscription services
In August 2014, SoundCloud announced that it would begin to further monetize the service through a new partner program known as "On SoundCloud", which allows "premier" partners to monetize their content through advertising units, including pre-roll audio ads, sponsorship of channels, mobile display ads, and native content. The company announced deals with a number of content partners (including Comedy Central and Funny or Die), independent labels, and YouTube multi-channel networks, but stated that it was in "active and ongoing, advanced discussion[s]" with major record labels, and was planning to launch a subscription-based music streaming product in the future.
Sources with knowledge of the company's next funding round spoke with the media in early December 2014 to reveal that ongoing discussions could raise about US$150 million in new financing, leading to a new valuation that would surpass the billion-dollar mark. Other startups that have crossed such a threshold include Spotify and Uber. At this time, SoundCloud claimed that 175 million unique listeners used the site each month, while about 12 hours worth of audio were being uploaded every minute. The major label issue became prominent again when the new financing information was released, as the lack of monetisation was presented as an issue—SoundCloud had managed to sign an agreement with Warner Music Group as part of the new premier program that allows both Warner Music, which also has a minor stake in the company, and its publishing division to collect royalties for songs they have chosen to monetize on the site; meanwhile, the other labels remained skeptical of the company's business model.
According to the company’s data, in December 2014, the service attracts more than 175 million unique monthly listeners, while content creators upload approximately twelve hours worth of audio every minute. According to further information released in December 2014, the introduction of ads had allowed SoundCloud to share revenue with about 60 other Premier Partners, including independent labels and artists, who are invited to participate and receive special promotion rights. Although SoundCloud did not have paid subscriptions for ad-free streaming, they had planned to launch one in 2015. Concerns over the amount of revenue from the program led Sony Music Entertainment to pull its content from the service entirely in May 2015. In June 2015, SoundCloud announced that it had reached a deal with the Merlin Network, a group representing 20,000 independent record labels, to monetize their content through the premier partner program.
In January and March 2016, SoundCloud reached respective deals with Universal Music Group and Sony Music Entertainment. A UMG spokesperson told The New York Times that the deal would give the company an option to require certain content to be restricted to paid subscribers—a statement suggesting that SoundCloud was preparing to launch its subscription streaming service.
- Among SoundCloud's key features is the ability to allow artists to upload their music with a distinctive URL. By allowing sound files to be embedded anywhere, SoundCloud can be combined with Twitter and Facebook to let members reach an audience better. By clicking a share button corresponding to the site where they wish to promote the shared content - such as Facebook - and approving the post, artists and publishers can let audiences on that site see the content through their desired media outlet. This contrasts with MySpace, which does not have reshare buttons. Over half the songs that are uploaded are played within the first 30 minutes, and 90% of all uploaded tracks receive a listen from at least one user.
- Registered users are allowed to listen to unlimited audio and may upload up to 180 minutes of audio to their profile at no cost.
- SoundCloud distributes music using widgets and apps. Users can place the widget on their own websites or blogs, and then SoundCloud will automatically tweet every track uploaded.
- SoundCloud depicts audio tracks graphically as waveforms and allows users to post "timed comments" on specific parts of any track. These comments are displayed while the associated audio segment is played.
- Other standard features include the ability to create playlists (previously known as "sets"), and to "Like", "Repost", and "Share", to "Follow" another user, and to make complimentary downloads of their audio available.
- SoundCloud's API allows other applications or smartphones to upload music and sound files, or download files if the user has permission to do so. This API has been integrated into several applications, most notably GarageBand, Logic Pro, and PreSonus Studio One DAW, as well as into music finders, including SoundYouNeed.
- SoundCloud supports AIFF, WAV, FLAC, ALAC, OGG, MP2, MP3, AAC, AMR, and WMA files and transcodes them at 128 kbit/s.
SoundCloud offers premium services for musicians under the banner SoundCloud Pro. The SoundCloud Pro service allows users to upload up to six hours of audio, and adds additional features such as enhanced analytics, and the ability to disable comments on tracks. The Pro Unlimited tier allows unlimited uploads.
On March 29, 2016, SoundCloud unveiled SoundCloud Go, a subscription-based music streaming service; the service integrates licensed music from major labels into the existing, musician-uploaded content of the service. Co-founder Eric Wahlforss stated that this aspect would help to differentiate SoundCloud Go from other music streaming services such as Spotify and Apple Music, as it technically provides a larger total library of songs than competing services, with a higher degree of diversity in its content. The Verge found that, excluding existing content uploaded by users, the service's initial library of songs is smaller than those of its closest competitors.
SoundCloud offers two mobile apps; the main SoundCloud app is oriented towards streaming, with music discovery, playlist, and sharing features. In November 2015, a separate app known as SoundCloud Pulse was first released for Android; it is primarily oriented towards content creators, allowing users to upload and manage their uploads, reply to comments, and view statistics. Pulse's features were previously located within the main app; senior marketing manager Brendan Codey explained that the shift to separate apps was meant to allow SoundCloud to improve its user experience for content consumers, without having to worry about how these changes affect features oriented towards creators.
As SoundCloud has grown and expanded beyond its initial user base, consisting primarily of grassroots musicians, some original users have complained that it is losing its fidelity to artists in an attempt to appeal to the masses, perhaps in preparation for public sale. Such criticism particularly followed the launching of a revamped website in 2013 that was heavily reconfigured to be more amenable to listeners—at the expense of artists, some claimed. CEO Alexander Ljung responded that while he would take these criticisms into consideration, the changes to the site would result in higher usage numbers for SoundCloud.
On 3 July 2014, TorrentFreak reported that SoundCloud offered unlimited removal powers to certain copyright holders, allowing those copyright holders to remove paid subscribers' content without avenue to contest and dispute wrongful deletions.
In April, 2015, SoundCloud announced a new partnership with Zefr, a content tracking company that works with YouTube to help identify songs on the platform and facilitate either takedowns or ads being run against it. This means Zefr is Soundcloud's copyright enforcement manager. The announcement is light on the hard details of what the two companies plan to do together, though Zefr states it will "better understand the sharing of content on the platform." Some users are worried it could mean a stricter copyright enforcement and more ads.
SoundCloud has a continuous play feature on non-mobile systems which relates to the listener's stream and likes. Unlike YouTube's autoplay feature which is on by default but can be turned off, users cannot turn off the continuous play feature on SoundCloud.
Soundcloud has also been criticized for changes in service. The new update of the website and application did make the interface more aesthetically pleasing, however it made the feed and interface more difficult to use for some users. Also, the anti-piracy algorithm that was put into place in order to combat the staggering number of illegal music downloads. The system has often been criticized for taking down music that was not illegally submitted or downloaded. The algorithm misfired and as a result, Soundcloud has been under criticism for it. Also, Universal Music Group has the right to take down any files on Soundcloud. Uploads can be taken down directly by Universal Music Group outside of Soundcloud's anti-piracy policy. Other than uploads, the company has the ability to take down accounts, both premium and free. Customers of the company have claimed this to be "bogus," arguing that the right to manage and delete accounts should be reserved to Soundcloud itself, not to an outside company.
The government of Turkey blocked access to the SoundCloud website on 24 January 2014. A user named "haramzadeler" ("bastards" in Turkish) uploaded a total of seven secretly recorded phone calls that reveal private conversations between the Turkish Prime Minister, Recep Tayyip Erdoğan, and others, including: Erdoğan Bayraktar, local politicians, some businessmen, and the prime minister's daughter, Sümeyye Erdoğan, and son, Bilal Erdoğan. Linked to the 2013 corruption scandal in Turkey, some conversations on the recordings revealed illegal activity and possible bribery—mainly about the building permit for villas located on protected cultural heritage sites in Urla, İzmir. The opposition party Cumhuriyet Halk Partisi submitted a parliamentary question to TBMM (the Grand National Assembly of Turkey) concerning the issue, which asked why SoundCloud services were banned without any proper cause or reason.
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According to a report from New York-based online news startup Vocativ, earlier on January 27 a Twitter user posted links to SoundCloud audio of phone conversations by Turkish Prime Minister Recep Tayyip Erdogan, whose government has been cracking down after allegations of widespread graft.
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Media related to SoundCloud at Wikimedia Commons