SoundCloud

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SoundCloud is an online audio distribution platform based in Berlin, Germany, that enables its users to upload, record, promote, and share their originally-created sounds. Founders Alexander Ljung and Eric Wahlforss are the chairman and chief product officer (CPO), respectively.

History

SoundCloud was established in Berlin in August 2007 by Swedish sound designer Ljung and Swedish artist Wahlforss. The founders 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.<ref name="Wired_01">Eliot Van Buskirk (6 July 2009). "SoundCloud Threatens MySpace as Music Destination for Twitter Era". Wired. </ref>

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.<ref name="Wired_01"/>

In a 2009 interview with Wired, Ljung said:

In April 2009, SoundCloud received €2.5 million Series A funding from Doughty Hanson Technology Ventures.<ref name="TechCrunch_01">Mike Butcher (18 May 2010). "Now a million on SoundCloud – This startup is scaling globally". TechCrunch. </ref> By May 2010, SoundCloud announced it had one million users.<ref name="TechCrunch_01"/>

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, and investments from Ashton Kutcher and Guy Oseary's A-Grade Fund.

On January 23, 2012, SoundCloud announced on their blog that they had 10 million registered users.<ref name="SoundCloudBlog">David Noël (23 January 2012). "SoundCloud Hits Ten Million Users". SoundCloud. </ref> By May 2012, 15 million users were announced by the company at a press conference held in San Francisco, where a new version of the API was previewed. The usage level for the site was growing by 1.5 million users per month at this stage.<ref name="Next">Drew Olanoff (9 May 2012). "SoundCloud announces "Next" version of its site, hits 15M users". The Next Web. The Next Web, Inc. Retrieved 11 December 2014. </ref>

The new API was released to the public in December 2012. To accommodate the proliferation of mobile devices, it provided 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.<ref name="Next" /> 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.<ref>Robin Wauters (10 December 2012). "SoundCloud user accuses SoundCloud of "doing a Zuckerberg" – on SoundCloud". The Next Web. The Next Web, Inc. Retrieved 11 December 2014. </ref> 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.<ref>Martin Bryant (4 December 2012). "With 10 hours of audio uploaded every minute, SoundCloud rolls its new site design out to all users". The Next Web. The Next Web, Inc. Retrieved 11 December 2014. </ref>

In March 2013, Twitter announced SoundCloud as a third-party music partner, alongside iTunes, in developing the Twitter's first 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.<ref>Peter Kafka (13 March 2013). "Twitter’s Music App Will Let You Watch, Too, With Help From Vevo". All Things D. Dow Jones & Company Inc. Retrieved 11 December 2014. </ref><ref name="Kaf" /> 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.<ref name="Jefferson Graham">Jefferson Graham (17 July 2013). "Who's listening to SoundCloud? 200 million". USA Today. </ref>

SoundCloud announced in January 2014 that it had commenced negotiations with the major music companies, as copyrighted material consistently appeared on the platform.<ref>Ellis Hamburger (24 January 2014). "SoundCloud pursuing its first licensing deals with record labels". The Verge. Vox Media, Inc. Retrieved 11 December 2014. </ref>[not in citation given] 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 finalizing such deals is a costly process.<ref name="Kaf">Peter Kafka (24 January 2014). "SoundCloud Has a New Pile of Cash, and Wants to Cut Deals With Big Music". ReCode. Revere Digital LLC. Retrieved 11 December 2014. </ref>

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.<ref>Tom Pakinkis (28 March 2014). "SoundCloud holding licensing talks with labels - report". Music Week. Retrieved 31 March 2014. </ref> However, the outcome of the talks was not forthcoming in any media sources.

In May 2014, the media reported that Twitter had regained interest in SoundCloud and was considering acquiring the platform for around US$2 billion, but 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<ref>Bobby Owsinski (24 July 2014). "Major Labels Buying Into Soundcloud Sets It Up For Acquisition". Forbes. Forbes, LLC. Retrieved 11 December 2014. </ref> that SoundCloud's ongoing inability to secure deals with the major music labels was the foremost culprit.<ref>Nathan Ingraham (20 May 2014). "Twitter's plans to purchase SoundCloud have evaporated, claims report". The Verge. Vox Media. Retrieved 11 December 2014. </ref>

On 28 September 2016, Spotify announced that it was in talks to buy SoundCloud,<ref>McIntyre, Hugh (28 September 2016). "Is Spotify Buying SoundCloud?". Forbes. Retrieved 9 October 2016. </ref> but on 8 December 2016, Spotify was reported to have abandoned its acquisition plans.<ref>Russell, Jon (8 December 2016). "Spotify has backed out of talks to acquire SoundCloud". TechCrunch. Retrieved 9 December 2016. </ref>

In July 2017, SoundCloud announced that it would close its San Francisco and London offices and lay off 173 out of 420 employees in an effort to become profitable,<ref>"SoundCloud Cuts 40% of Staff in Push for Profitability". Bloomberg.com. 2017-07-06. Retrieved 2017-07-10. </ref> with the remaining staff operating out of offices in Berlin and New York.<ref>https://blog.soundcloud.com/2017/07/06/note-alex-ljung/ blog.soundcloud.com</ref> 40% of their staffs were lay off as a saving strategy for the company finance only until Q4 which was 80 days from 12 July 2017<ref>Constine, Josh. "SoundCloud sinks as leaks say layoffs buy little time". Techcrunch. Retrieved 21 September 2017. </ref>

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.<ref name="billboard-premiercontent">"SoundCloud Debuts Monetization Play With 'On SoundCloud', Announces $100 Million In Funding". Billboard. Retrieved 29 March 2016. </ref>

Sources with knowledge of the company's next funding round publicly revealed in early December 2014 that ongoing discussions could potentially raise approximately US$150 million in new financing, resulting in a valuation surpassing one billion dollars. The major label issue became prominent again when the new financing information was released, as the lack of monetization 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.<ref name="Ev" /><ref name="Jill" />

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.<ref name="Ev">EVELYN M. RUSLI, HANNAH KARP, DOUGLAS MACMILLAN (9 December 2014). "SoundCloud’s Valuation Could Top $1.2 Billion With New Fundraising". The Wall Street Journal. Retrieved 11 December 2014. </ref><ref name="Jill">Jill Krasny (9 December 2014). "SoundCloud May Soon Join the Billion-Dollar Startup Club". Inc. Monsueto Ventures. Retrieved 11 December 2014. </ref> 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.<ref name="Ev" /><ref name="Jill" /> Concerns over the amount of revenue from the program led Sony Music Entertainment to pull its content from the service entirely in May 2015.<ref name="verge-sonygone">"Sony pulls music from SoundCloud over money dispute". The Verge. Retrieved 29 March 2016. </ref> 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.<ref name="variety-merlin">"Soundcloud Signs Indie Labels As It Preps Subscription Service". Variety. Retrieved 29 March 2016. </ref>

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.<ref name="verge-umgdeal">"Soundcloud strikes licensing deal with Universal Music Group". The Verge. Retrieved 29 March 2016. </ref><ref>Sarah Perez, TechCrunch. “SoundCloud confirms its deal with Sony Music, paving the way for its subscription service's launch.” 18 March 2016. 18 March 2016.</ref><ref>"Sony Has Officially Signed On To SoundCloud". Forbes. Retrieved 21 March 2016. </ref>

On 29 March 2016, SoundCloud launched its subscription music streaming service, SoundCloud Go.<ref name="lat-scgo" /> In February 2017, SoundCloud launched a mid-range subscription tier named SoundCloud Go, that allows users to remove ads and listen offline for $5 per month.<ref>Digital Trends (28 February 2017). "SoundCloud debuts middle-tier streaming service, its cheapest ad-free option ever". Parker Hall. Retrieved 1 March 2017. </ref> The original version, which was renamed SoundCloud Go+, allows access to over 150 million songs, offline playback, no ads, no previews, and premium music tracks for $10 per month.<ref>Parker Hall (28 February 2017). "SoundCloud debuts middle-tier streaming service, its cheapest ad-free option ever". Digital Trends. Retrieved 1 March 2017. </ref><ref>Max Buondonno (28 February 2017). "SoundCloud Introduces $5/Month Go Plan, Renames $10/Month Plan ‘Go+’". MBEDDED. Retrieved 1 March 2017. </ref>

Features

Among SoundCloud's key features is the ability to access uploaded files via unique URLs, thus allowing sound files to be embedded in Twitter and Facebook posts (note: as of 12 August 2015, mobile devices require a SoundCloud app to play a track within Facebook, an issue confirmed by SoundCloud in November 2016<ref>"SoundCloud Help Community". </ref>). A file may be embedded by clicking a share button corresponding to the target site (e.g., Twitter). This contrasts with MySpace, which does not have reshare buttons.<ref name="Wired_01"/>

In 2013, more than 50% of songs were played within 30 minutes of being uploaded, and 90% of all songs received at least one listen.<ref>Hill, Brad (14 November 2013). "Soundcloud celebrates five years; releases impressive stats". Rain News. </ref>

Registered users are allowed to listen to unlimited audio and may upload up to 180 minutes of audio to their profile at no cost.<ref>Woods, Ben (4 January 2014). "15 of the best music streaming platforms online today. Which one is best for you?". TheNextWeb.com. </ref><ref>"Introducing On SoundCloud, our new creator partner program". SoundCloud Blog. Retrieved 27 September 2014. </ref><ref>"On SoundCloud". Retrieved 27 September 2014. </ref>

SoundCloud distributes music using widgets and apps.<ref name="TechCrunch_01"/> Users can place the widget on their own websites or blogs, and then SoundCloud will automatically tweet every track uploaded.<ref name="Wired_01"/>

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.

Users are allowed 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.<ref>"SoundCloud Music & Audio". Soundcloud HQ. Retrieved 18 February 2017. </ref>

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.<ref name="Wired_01" /> This API has been integrated into several applications, including GarageBand, Logic Pro, and PreSonus Studio One DAW.<ref>"Musikmesse 2010: PreSonus launches major enhancements to Studio One". MusicRadar.com. 22 March 2010. Retrieved 27 April 2010. </ref>

SoundCloud supports AIFF, WAV, FLAC, ALAC, OGG, MP2, MP3, AAC, AMR, and WMA files. It then transcodes them to MP3 at 128 kbit/s for streaming purposes.<ref>"Uploading requirements". SoundCloud. SoundCloud. Retrieved 21 March 2016. </ref>

Subscription services

SoundCloud Pro

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.<ref name="tnw-scpro">"SoundCloud launches simplified, cheaper Pro plans and embraces brands with Pro Partner accounts". The Next Web. Retrieved 29 March 2016. </ref>

SoundCloud Go

On 29 March 2016, SoundCloud unveiled SoundCloud Go, a subscription-based music streaming service; the service provides an ad-free experience, offline playback, and integrates licensed music from major labels into the existing, user-uploaded content of the service.<ref name="pcmag-goplus"/> 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.<ref name="lat-scgo">"SoundCloud offers a subscription service in a late play for mainstream music fans". Los Angeles Times. Retrieved 29 March 2016. </ref><ref>Kastrenakes, Jacob (29 March 2016). "SoundCloud’s subscription streaming service is here (and it needs work)". The Verge. Retrieved 16 July 2016. </ref>

The service was initially priced at US$10 per-month. On 28 February 2017, SoundCloud re-named its main Go plan SoundCloud Go+, and added a secondary tier titled SoundCloud Go at a US$5 price point, which does not include the licensed music library, but still offers ad-free and offline playback.<ref>"No One Wants to Pay $9.99 for Your Remixes". Bloomberg.com. 4 January 2017. Retrieved 28 February 2017. </ref><ref name="pcmag-goplus">"SoundCloud Adds $5 Monthly Plan". PC Magazine. Retrieved 28 February 2017. </ref>

Mobile apps

SoundCloud offers two mobile apps; the main SoundCloud app is oriented towards streaming, with music discovery, playlist, and sharing features.<ref name="tc-scapps">"In Wake Of Apple Music, SoundCloud Update Focuses On Music Discovery, Better User Experience". TechCrunch. AOL. Retrieved 29 March 2016. </ref> 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.<ref name="tc-pulse">"SoundCloud Rolls Out A Dedicated App For Creators". TechCrunch. AOL. Retrieved 29 March 2016. </ref>

By the end of 2016, SoundCloud's Android app had over 100 million downloads.<ref>"SoundCloud - Music & Audio - Android Apps on Google Play". play.google.com. Retrieved 25 August 2016. </ref>

On 1 April 2017, Chromecast support was added to the main SoundCloud iOS app.<ref>Welch, Chris (1 April 2017). "SoundCloud adds Chromecast support on iOS". The Verge. Retrieved 1 April 2017. </ref>

Reception

Recognition

SoundCloud won the Schroders Innovation Award at the 2011 European Tech Tour Awards Dinner.<ref>Rooney, Ben (3 November 2011). "Soundcloud, Wonga Win Tech Tour Awards". The Wall Street Journal. </ref><ref>"Tech Tour". </ref>

Criticism

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.<ref>Mac, Ryan (26 April 2013). "SoundCloud Manages Criticism as it Moves to Become the YouTube of Audio". Forbes. </ref>

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.<ref>"Universal Music Can Delete Any SoundCloud Track Without Oversight". TorrentFreak. 3 July 2014. </ref> This was discovered after Mr Brainz, a DJ on popular underground internet radio station Sub.FM<ref>"Universal reportedly given freedom to remove content from Soundcloud". Mixmag. </ref> shared his email communication between Soundcloud support staff with music blog Do Androids Dance.<ref>"Soundcloud Boldly Releases New App, Allows Universal to Flag Your Account, and Quietly Announces Data Mining, All in One Month". Complex Media. 3 July 2014. </ref> The article has since been removed from the web after merging into parent entity Complex Media.

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. 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.<ref name="musictimes.com">"SoundCloud Partnering With Zefr, YouTube's Copyright Enforcement Manager". Music Times. Retrieved 22 January 2017. </ref>

In July 2016, SoundCloud notified registered users via email that it would be "phasing out" groups because they "were not a strong driver to help users share their new tracks to the most users effectively".<ref>"I'm a moderator. How can delete tracks in group in new design of site?". Retrieved 21 December 2016. </ref> This announcement was met with alarm and concerned responses from numerous artists, who deemed the change unacceptable because it would eliminate their only effective means of sharing music on SoundCloud.<ref>"SoundCloud is phasing out groups, one of the few remaining ways to actually share my music to new listeners". Retrieved 21 December 2016. </ref>

SoundCloud has a continuous play feature on non-mobile platforms 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.<ref>"How do I disable that #$%#$% Autoplay". SoundCloud Community. </ref>

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.<ref>"SoundCloud More Affordable for Creators, As Service Attempts Balancing Acts [Analysis] - CDM Create Digital Music". 25 March 2013. </ref> 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.<ref>"SoundCloud Has Given Universal Music Group The Ability To Directly Remove Content - Techdirt". Retrieved 1 July 2016. </ref>

Blocking

The government of Turkey blocked access to the SoundCloud website on 24 January 2014.<ref>Marc Hogan. "Has Turkey Banned SoundCloud?". Spin. Retrieved 4 February 2015. 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. </ref><ref>"Soundcloud.com'a erişim engellendi". Sözcü Newspaper (in Turkish). Sözcü. Retrieved 25 January 2014. </ref><ref>Dorian Jones. "Turkey: Is a Dark Net Rising?". Eurasianet.org. Retrieved 1 February 2014. </ref> A user named "haramzadeler" ("bastards" in Turkish) uploaded a total of seven secretly recorded phone calls that reveal private conversations between the Former Turkish Prime Minister Now President of Turkey, Recep Tayyip Erdoğan, and others, including: Erdoğan Bayraktar, local politicians, some businessmen, and the prime minister's daughter, Sümeyye Erdoğan, and son, Bilal Erdoğan.<ref>Oray Egin. "Loose Lips Threaten Turkey's Powerful". Vocativ. Archived from the original on 29 January 2014. Retrieved 30 January 2014. </ref> 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.<ref>"Erdoğan Sacks Izmir Gov'nor for Shady Villa Deal". Aydınlık. Archived from the original on 22 December 2014. Retrieved 30 January 2014. </ref> 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.<ref name="Soundcloud.com’u Erdoğan mı kapattı?">"Soundcloud.com'u Erdoğan mı kapattı?". Sözcü Newspaper (in Turkish). Sözcü. Retrieved 25 January 2014. </ref><ref name="Turkish main opposition questions Erdoğan about Urla villas">"Turkish main opposition questions Erdoğan about Urla villas". Today's Zaman. Retrieved 30 January 2014. </ref>

See also

References

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Further reading

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External links

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