SoundCloud’s woes signal storm clouds for music discovery

First off, just want to shout out to everyone that lost their job at SoundCloud last week. Sad news for everyone involved.

SoundCloud innovated music discovery in a way no other platform has. The ability to share feedback on a second-by-second granular level hasn’t been rivaled yet. And it’s still my favorite feature — especially when considering alternative forms of engagement. Listeners and creators reacting on the fly to moments within songs is the ultimate form of engagement and interaction.

Can’t even count how many email threads I’ve rifled off with friends where whole albums or DJ sets are dotted with minute-level reactions. SoundCloud scaled this in a near perfect way.

(Side note RE engagement: I had lunch with a friend this past weekend and his 12 year old son signed me up on musical.ly. The level of engagement, centrality around music, and mashup of existing technologies is a trifecta for success.)

With the recent allegation that Spotify is involved in creating non-existent artists to reduce or eliminate royalty payments to real ones, the news about SoundCloud and its precarious future hits even harder.

For the record, here’s Spotify’s response to said allegations:

“We do not own rights, we’re not a label, all our music is licensed from rights holders and we pay them — we don’t pay ourselves. We do not own this content — we license it and pay royalties just like we do on every other track.”

What is and isn’t true will get sorted over time. But the juxtaposition between the democratic, level playing field of SoundCloud with the (at a minimum) label-influenced Spotify is dramatic.

Entire genres of music were created on SoundCloud. Where were lo-fi rap and orchestral jazz before it? Spotify has mightily taken the baton and developed a complex playlist ecosystem but there is a noticeable difference between the algorithms on both platforms.

It’s well documented that SoundCloud recommends songs based on what you just heard. Whereas Spotify recommends more holistically, taking into consideration many more data points.

What this has always meant for SoundCloud, though, is that the opportunities for discovery of a similar sounding but unknown artist is greater.

SoundCloud has also been a critical partner and platform for early podcasters — especially music-centric ones. Every podcast I’ve produced or been a part of has been hosted on SoundCloud. And many influential podcasters and podcast networks have grown up on Soundcloud. The Ringer is one that comes immediately to mind.

The largely agnostic and anti-gatekeeper approach has been SoundCloud’s greatest strength. And the loyalty of the community speaks directly to that. But, sadly, it’s also shaping up to be one of the biggest challenges to its long term sustainability. Especially in an environment where strategic partnerships, monied interests, and public markets have the last word.

Here’s hoping that it remains the beacon of culture and career launchpad it’s been for so many years.