SoundCloud, the popular streaming platform that has become the outlet for young creatives looking to make it big, was recently saved by an emergency round of funding. The company was on the brink of failure after it laid off 40% of its staff and was destined to sink by its fourth quarter, but investments from the Raine Group, a New York based investment bank, and Temasek, a holding company owned by the government of Singapore, will keep SoundCloud alive for now.
Kerry Trainor, the former CEO of Vimeo, will take over as SoundCloud’s CEO, and now former SoundCloud CEO Alex Ljung will loosen his grip on the company and become chairman. Previously, SoundCloud’s worth sat at around $700 million, but the latest funding round shows an investment of just under $170 million, much less than the number above. With many employees gone, new management, new investors, and a need to change things up financially, many people are wondering: What is the future of SoundCloud?
To attempt to answer that question, one must look at the SoundCloud arena right now. The age of “SoundCloud rap” is in full-fledged existence, a scene marked by young, anti-establishment artists who look like rock and roll’s punk era. The New York Times ran a story on SoundCloud rap, marking the streaming service as,
“…the streaming service most oriented toward music discovery, and the one with the lowest barrier to entry. That has meant a new ecosystem of rising stars, who ascend quicker than ever — releasing songs that get millions of listens, booking nationwide tours, selling merchandise — without traditional gatekeepers.”
The lack of gatekeepers is what makes SoundCloud different than other streaming platforms. From cassettes to CDs to mp3s to iTunes, the major streaming services (Spotify, Apple Music, Tidal) have replaced record stores as the place to consume music. Music’s streaming age is a step towards artistic independence in itself, but what these platforms have become is the destination for all artists, signed and unsigned, to have their music professionally displayed and producing income. But just because it is streaming does not mean an artist can easily get their music there; steps to verification exist and are often made easier by the presence of another involved entity.
This is where SoundCloud differs. There is no verification or steps to entry; anybody can create an account and upload audio for free. Though this does not bring in money, it does offer a space where an artist can grow a fanbase, spread their music within a massive listening community, and share it to others outside of that community. With so much SoundCloud music in existence, stars in their own right can filter through the mass and make their way into the ears of critics and users alike; notably, one of the biggest stars to come from the SoundCloud age is Chance the Rapper who has continued to use the platform through his burgeoning big time career; though his last album is offered on the major streaming services, that album as well as his entire catalog of music can all be found on SoundCloud. When word came around that the company might fail, he tweeted his support.
I’m working on the SoundCloud thing
— Lil Chano From 79th (@chancetherapper) July 13, 2017
Just had a very fruitful call with Alex Ljung. @SoundCloud is here to stay.
— Lil Chano From 79th (@chancetherapper) July 14, 2017
SoundCloud is still the platform of choice for many major artists who are looking to spread a new song quickly and easily. SoundCloud has also made international political news for its easy uploading; in 2014 an anonymous uploader published incriminating phone calls from Turkey’s Prime Minister which then got the streaming service banned in the country. This is what is important about SoundCloud: even in a musical Renaissance where high quality art can be discovered and shared, there must exist a public gallery where any and everybody can display their art before it makes money in the private gallery. SoundCloud offers that necessary exposure and growth.
So what is SoundCloud’s future? With new management, some people are skeptical of what will come. Leah Kardos writes for The Conversation that,
“No doubt, SoundCloud’s new investors will seek to transform the currently debt-ridden company into a money-making enterprise…As a result, SoundCloud is unlikely to be the same again. This is bad news for the listeners and music creators who rely on the service for documentation and discovery.”
If SoundCloud moves farther into the music industry, almost as neighbors to Spotify and Apple Music, the wandering, flowering landscape may be paved over with more gates and barriers to entry. SoundCloud could begin using a business model that would be better for the company but worse for the artists it represents.
With the former CEO of Vimeo taking charge, SoundCloud might be able to find a business model that supports its free use style. Vimeo found a way to excel in the YouTube age by becoming an almost high class version of YouTube, with its main catalog of uploads being art and film-based. Though SoundCloud may align better with YouTube in this analogy, it is still an expanse that is fueled by art and the people who create it. If Kerry Trainer can bring what he did with Vimeo to SoundCloud, the streaming platform may be able to survive and keep its grittiness that makes it special.
For now, SoundCloud is up and running and young creatives can use it as they have before. Changes will soon be made, and with that users must be aware of what is to come and how that might affect their product. Hopefully, the new heads at SoundCloud won’t take away from what has made it great throughout its existence.
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