8Sided Blog

the scene celebrates itself

SoundCloud’s Phoenix Rises

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It wasn’t that long ago that, along with many others, this blog was contemplating the possibility of SoundCloud’s demise. Yesterday it was announced, via an annual report, that SoundCloud just achieved its first profitable quarter. I’ve always rooted for SoundCloud, so I’m happy for the previously troubled company. 

We can guess at multiple factors for this success. Kerry Trainor’s guidance as CEO looks valuable. As he was previously in charge of Vimeo, many hoped he would bring SoundCloud’s focus back to creators after its short attempt to rival other streaming platforms. SoundCloud’s strength and distinction is its creator community. The shift back to those roots under Trainor (helped by the phenomenon of SoundCloud Rap) put the company back on a lot of radars.

SoundCloud’s integrations and partnerships added value to the service, creating more income opportunities and Pro-level subscribers. Distribution via Repost to the likes of Spotify, AI mastering through Landr, and integrations with multiple DJ software partners (including Pioneer, Serato, and Native Instruments) — among other features — offer an attractive proposition for artists. Platforms like Spotify and Apple Music are wary of such integrations, presumably to keep us within their walled gardens. But users love to tie together the multiple apps and services they use, especially when sharing and promoting music. SoundCloud is smart to welcome these third-party collaborators.

In Music Business Weekly, SoundCloud boasts of 250 million tracks on the platform, versus the 70 million-ish songs on Spotify. Of course, these aren’t all polished songs — this number counts all the demos, goof-offs, DJ mixes, spoken content, and sound collages found on SoundCloud. But this brings out another factor for SoundCloud’s renewed success — the pandemic. In the report, SoundCloud says COVID-times have presented “a true mix of tailwinds and headwinds” (perhaps the understatement of the year). It seems advertising income is the central area of uncertainty. In the ‘tailwind’ category, artists and budding artists in lockdown are adding more music than ever to SoundCloud. Subscriptions are on the rise, as are paying users of the Repost distribution service (estimated to number at 80,000 artists this month). 

Time will tell if this profitable quarter is a fluke for SoundCloud. Spotify only recently achieved occasionally profitable quarters, but its finances still hang in the balance. However, I blanch at writing about profits and earnings reports in this blog, especially as a success measure. What’s important to me is the persistence of this vital tool for sound-creators and their communities. SoundCloud remains a piece of the music ecosystem puzzle and a necessary stomping ground for new and emerging artists worldwide.

🔗→ Soundcloud’s Revenues Jumped 37% to $166m in 2019 – and It’s Just Posted Its First Ever Profitable Quarter

#Worktones: Onlee’s United Isolation Ambient Mix

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https://soundcloud.com/onlee/united-isolation-ambient-mix

Our ‘strange times’ lockdown has inspired many artists and DJs to create ambient mixes. These mixes help calm the thoughts and nerves of others, especially those not used to working from home for long stretches. But it’s safe to say these mixes also serve the DJs creating them — something is reassuring and meditative in compiling a set focused on texture rather than beats.

My good friend Boris, DJ’ing as Onlee and running the cool experimental techno label Lichen Records, has undoubtedly delivered on both results with his United Isolation Ambient Mix. It’s nearly four hours long and reaches into selections that aren’t too dark or dramatic but never dull. There’s no tracklist, but, honestly, keeping tabs on the songs would distract from treating this as one long evolving soundscape.

I’ve played this in the home office for the last few days, and it’s effectively kept rogue brainwaves at bay. So, yes, this mix is a suitable prescription for strange, unsettling times.

SoundCloud’s Distribution: Not Taking a Cut?

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Kori Hale in Forbes:

SoundCloud’s new Premiere distribution channel should streamline the money artists receive from various platforms, and help monetize their music through a revenue sharing program. By Investing in tools artists need, CultureBanx reported they can offer more value and potentially become a more profitable company, instead of trying to directly compete with Apple Music and Spotify.{…}

SoundCloud won’t take a cut of the payouts artist receive from the other music streaming services. The new distribution tool will be available to eligible SoundCloud Pro $6/month and SoundCloud Pro Unlimited $12/month subscribers.

As MusicAlly reported, SoundCloud’s distribution engine is powered by FUGA. I can’t imagine FUGA isn’t taking a cut, so my guess is that SoundCloud won’t take anything off the net received from FUGA. If SoundCloud is selling this as if artists will get the full distributor percentage from Spotify and Apple Music it’s disingenuous. Does anyone know the deal?

🔗→ SoundCloud’s Urban Culture Streams Into Spotify & Apple Music

SoundCloud’s Move Into Distribution

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SoundCloud continues to make major moves … via MacRumors:

SoundCloud today announced a new feature that allows creators to distribute their music directly to major streaming music services like Apple Music, Spotify, and Amazon Music. The tool will be included in SoundCloud Pro and Pro Unlimited subscription tiers for artists, and each artist will get 100 percent of earnings back from each streaming platform, meaning SoundCloud won’t take any cuts and won’t charge additional distribution fees.

Note that a participating artist account will have to show at least 1,000 plays a month in regions where SoundCloud subscriptions and advertising are active. A SoundCloud Pro account ($6/month) seems to allow distribution of a single release — I assume that’s per year, based on the yearly rate. The SoundCloud Pro Unlimited subscription ($12/month) gives the artist unlimited distribution.

This landscape is going to get a whole lot more interesting if the DSPs get into a sort of distribution battle. What features and analytics are coming to differentiate each of the services? I am sure these will exploit the advantages of being aligned with the native platform of the distributor — perks on SoundCloud, perks on Spotify. Dedicated distributors like Symphonic will still have a role as they offer expanded label services (playlist pitching, sync, publicity, etc.) that the streamers don’t provide (yet). An advantage for dedicated distributors is they will pitch and promote across all platforms instead of mainly focusing on one. I doubt SoundCloud’s distribution will pull much weight when it comes to Spotify placement and vice versa.

If you use Spotify or SoundCloud or — someday soon, I’m sure — Apple Music for distribution the choice will come down to which platform makes the most sense for you. Where are you strongest? Which streamer best aligns with your genre or brand? If you’re a singles artist, releasing a song every couple of weeks or so, then SoundCloud is the platform for you. SoundCloud’s design has always favored the prolific singles artist, and having these individual songs appear everywhere else is icing on the cake.

Is there a downside for SoundCloud? Part of the platform’s appeal is an egalitarian approach to user content — anyone can upload anything — and the byproduct is a lot of music found only on SoundCloud. That’s how ‘SoundCloud rap’ got its name after all — for a while, SoundCloud was the only place one could find those artists. If this distribution service makes it just as easy to upload content to its competitors, then SoundCloud could lose its tastemaking edge. Why keep anything exclusively on SoundCloud anymore?

Oh, and this is interesting, via Music Business Worldwide:

To use the toolset, these artists must also have no copyright strikes against their music on SoundCloud at the time of enrollment.

Obviously, this is meant to thwart the distribution of content not owned by the user (a big problem for these uncurated distribution portals). But it’s also a clever way to make SoundCloud’s users think twice before uploading those unauthorized remixes for distribution or otherwise. That said, it would be nice if there was a tool to show whether a DJ mix or remix would be flagged before it’s posted, or if its content safely fell under the Dubset umbrella. It would suck to get flagged for a song innocently included in a DJ mix and have the distribution option deactivated as a result.

🔗→ SoundCloud Premier
🔗→ SoundCloud’s New Tool Lets Artists Distribute Music Directly to Apple Music and Spotify
🔗→ SoundCloud is now a distributor: Platform launches tool for users to upload music to Spotify, Apple Music etc.

SoundCloud’s Rebirth

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Rolling Stone:

Per the fiscal 2017 filing, SoundCloud has taken “significant steps to improve its financial health,” including renegotiating certain rightsholder contracts, retiring outstanding debt and cutting major operating expenses, and it achieved positive operating cash flow in 2018.

While its 2018 results will not be available until later this year, SoundCloud says it has surpassed its 2018 growth plan and remains focused on two major ideas: expanding its creator business with a suite of useful artist tools and offering a unique listening experience for its “young, trendsetting, global music fans.” The latter will be increasingly tough as Spotify, Apple Music and other big streaming services solidify their place as market leaders, but the former — a focus on music creation — is something in which SoundCloud remains unsurpassed.

SoundCloud is a popular subject on this blog and, yes, there was a time when we contemplated the service’s possible demise. It’s astonishing that SoundCloud once made a go at Spotify and Apple Music, and the ensuing failure was arguably the direct result of an overreach to attract a mass audience.

I’d say ‘SoundCloud rap’ saved the platform’s bacon. This phenomenon was bubbling hard during the depths of SoundCloud’s financial woes and surely pointed the way out: by doubling down on a core user-base of creators, and looking to lead and create trends rather than passively following behind as a mainstream digital service provider. I continue to root for SoundCloud.

🔗→ SoundCloud, Making $100 Million a Year, Is Back on Solid Ground

Dubset’s Major Move

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TechCrunch:

Spotify and Apple Music could soon get the legal grey area of music like remixes and DJ sets that today live unofficially on SoundCloud. Sony Music Entertainment today became the first major record label to allow its music to be monetized through unofficial mixes thanks to a deal with rights clearance startup Dubset. That means Sony’s master recordings will be indexed by Dubset, and rights holders will be compensated even if just a tiny one-second snippet of their song is used in a DJ set or remix.

A source tells TechCrunch that Dubset is getting closer to securing deals with the other two major labels Warner and Universal.

If it can lock down all three, remixes and DJ sets featuring almost any music could be legally hosted on the top streaming services instead of being barred or removed for copyright infringement. That might eliminate the differentiation that’s kept struggling SoundCloud afloat. Illegal music uploaded there has sometimes flown under the radar since SoundCloud is protected by Safe Harbor law regarding user generated content. But if it’s legally available on Spotify, Apple Music, and elsewhere, listeners wouldn’t have to go to SoundCloud.


Could we be stepping closer to a mainstream acceptance of remix culture? A future where derivative works are not only allowed but encouraged is a divergent music future, indeed. As previously stated on this blog, if you can clear unauthorized remixes using Dubset, then why not clear samples eventually? We might be entering an era where most music is fair game for creative mutation, and the original artists get paid. How will that work with songs already released, especially the ones that sneakily didn’t clear drum loops or other samples? Should clearance lawyers start looking at new career options?

As far as Apple Music and Spotify go, I really can’t see them opening up their services to user-uploaded content a la SoundCloud. I’m ready to be surprised, but I do think those predictions are off the mark. The Verge gives a clue to where this might be headed for the two big streamers:

DJ mixes have historically proved to be especially difficult for monetized distribution. “The average mix is 62 minutes long and has 22 different songs in it, and those 22 different songs are represented by over 100 different rights holders,” {Dubset CEO Stephen} White tells The Verge. Using Dubset’s technology, a 60-minute mix can be processed in just 15 minutes.

During that 60-minute mix, White says, MixSCAN will fingerprint every three seconds of audio. “We’re using a combination of audio fingerprinting technologies and fairly advanced algorithmic approaches to identify the underlying masters that are being used in a mix or a remix,” he says. Although MixBANK asks DJs themselves to identify the masters, White says this is just to help validate MixSCAN’s results.


Apple’s Beats 1 Radio regularly broadcasts sets by newsworthy artists and celebrities, but the Beats 1 platform still fails to make the news. These DJ events need exposure outside of the ephemeral original broadcast. Wouldn’t it be nice if the sets were recorded and archived, and then available to play on demand via Apple Music? I think that’s what’s happening here. A different sort of license is required to make these DJ sets available on demand, and every song (and, yes, unofficial remix) must be cleared for this type of usage. Theoretically, Dubset’s technology would not only clear the songs in the mix, but it would be able to do so in 15 minutes. A Beats 1 set could be available to stream on Apple Music within thirty minutes of its broadcast. Voilà. And I’d wager Spotify has similar ambitions.


Previously and Previously and Previously

SoundCloud Headed for the Cut-Out Bin?

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Recode:

Sources say {SoundCloud} has been trying to raise more than $100 million since last summer, without success. It has also talked to potential acquirers, including Spotify, without closing a deal.



The upshot, according to people familiar with the company: SoundCloud is now at a point where it may sell for less than the $700 million investors thought it was worth a few years ago. One source thinks it will consider bids, as long as they’re above the total investment it has raised to date — about $250 million.



SoundCloud’s struggle is taking place while there’s renewed investor interest in streaming music. Even though the industry’s economics are challenging, users have embraced streaming, and are even willing to pay for it: Spotify, which would like to go public next year, says it has more than 50 million paid subscribers worldwide. Apple Music says it has more than 20 million paid subs. {SoundCloud} says it has 175 million monthly unique users, but it hasn’t updated that number since 2014.



With Pandora experiencing similar woes, it would seem that a tech company wanting to enter the music landscape could make a big splash by acquiring both SoundCloud and Pandora at a good price and combining their users. Maybe one of these will be interested?



Update: SoundCloud forges ahead … this just in from Hypebot:

Beginning today, SoundCloud is inviting DJs and producers who create sets, remixes and other forms of creative works to join its Premier program to earn revenue for the tracks they share on SoundCloud.



Premier creators can monetize their content and earn a portion of the revenue generated by subscriptions and advertising on SoundCloud. Acceptance is still “invite only,” but you can apply here.



SoundCloud has not shared how many artists are Premier members, its criteria for acceptance, or how revenue is shared with creators.

Spotify Ditches SoundCloud Bid (Again)

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Techcrunch:

The Financial Times reported in September that {SoundCloud and Spotify} were in “advanced talks” over an acquisition — things went pretty quiet after that, but we now understand that the deal died this past week. The source told TechCrunch that the company ultimately walked away because it feared that an acquisition could negatively impact its IPO preparation.



Spotify hasn’t officially said it will go public in 2017, but there has been plenty of speculation, including a funding round with incentives tied to a listing. The source said Spotify went cold on SoundCloud because “it doesn’t need an additional licensing headache in a potential IPO year.” That’s in reference to the complexity and financial cost that comes with negotiating with music labels, something that is hugely important to SoundCloud, which has a far larger catalog of tracks than other services because it caters to creatives, indies and remixers.



Spotify is reported to have declined to acquire SoundCloud two other times over the past two years, the FT said, with a proposed price apparently the sticking point on those occasions. Beyond expanding Spotify’s ad network and userbase, a deal was seen as key to strengthening its position as well-funded competitors ramp up their music services.

Music Industry Blog wondered back in September if SoundCloud has already peaked:

Throughout the 2010’s Soundcloud’s growth was impressive, growing from 1 million registered users in May 2010 to 150 million by December 2014. But registered user numbers only ever tell part of the story. The most telling statistic is Soundcloud’s Monthly Active User (MAU) number: 175 million. Impressive enough, and 50 million more than Spotify’s 125 million. But Soundcloud hit that number in August 2014 and it hasn’t reported a bigger number since. In fact, it could well be that Soundcloud hasn’t actually issued a new number since, but instead has simply being restating that number. If it had grown, you can be sure we’d have heard about it. If it had fallen, perhaps not.

SoundCloud Partners With LANDR

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With the introduction of SoundCloud’s paid ‘Go’ service and external pressure to become a more commercial enterprise, there’s been heated speculation that the site might forgo its commitment to the independent musicians and DJs who have been SoundCloud’s emphasis. Today’s news, though a minor announcement to most, may be a signal that music creators will remain the focus of SoundCloud’s long game. Via FACT:

SoundCloud has announced a partnership with online mastering service LANDR that means all users can get free track optimization for the streaming platform. The partnership sees SoundCloud focusing once again on its original market of music creators rather than consumers after the launch of its paid subscription service, SoundCloud Go.

A LANDR spokesman said: “We use exactly the same algorithms but we did some research to find the best output for optimizing the sound of any track on the SoundCloud streaming format. The optimized tracks will only be hosted on SoundCloud and not in LANDR’s track library. It is really aimed at streaming on SoundCloud."

Professional mastering is regardless still mandatory for commercial release (seriously … please), but this is a smart move that not only gives the music uploader a little something extra out of using SoundCloud, but also improves audio consistency throughout the site.

Update, via Ars Technica:

Landr’s landing site describes the mastering process as “complicated and elusive,” then insists that its product, which is almost entirely algorithm-driven, delivers a quality product for small-fry musicians by intentionally limiting how many options they can pick from. “Great design is all about limiting the field,” Landr says. As a result, the company touts that “we’re confident you’ll hear the difference” between professional mastering work and what Landr can pull off.

After our tests of SoundCloud’s new Landr functionality, we can safely agree with that statement—in every bad way possible.

A Boost for DJ Mixes and the New Streaming ‘Sub-Economy’

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Billboard:

The National Music Publishers’ Association (NMPA) and Dubset have reached a deal that will allow the NMPA’s independent members, both publishing companies and songwriters, to take part in a new streaming “sub-economy” that only recently became technologically feasible. This new revenue source is through derivative works, or pieces of music that are wholly or partially based on others’ creations, like DJ mixes and remixes. Through its MixBANK, Dubset cross-sections these creations and identifies their constituent parts (a vocal line here, one-half of an entire song there), determines the appropriate royalty splits, then services them to its clients, like Apple Music.

Dubset isn’t the only company making advances in this highly technical space. SoundCloud’s new subscription service, Go, uses an undisclosed process to identify derivative works, which its platform has plenty of. (This, despite a recent report to the contrary.)

Hypebot:

Through the Rights Agreement, NMPA members who opt-in will have access to Dubset’s MixBANK platform where they can set terms and rules around how and where their catalog may be used in mix content. Each time a new mix or remix is delivered to MixBANK the clearance rules set by rights holders to determine whether the content is cleared for distribution are applied. Cleared mix and remix content is then made available to legal music services under an approved royalty structure.

Pay no mind to Digital Music News’s shadowy anonymous sources … DJ mixes and remix culture are on the rise in the social sphere.

(Previously)

Update (May 25, 2016); via Hypebot:

Dubset Media announced today that it has reached an agreement with Spotify to use its MixBANK distribution platform. The deal makes it possible for DJs to upload and legally stream their mixes and single track remixes. In addition, the new agreement is expected to enable Spotify listeners to stream radio shows and other user generated mixes that have not been previously legally available to music fans.