Tuesday, March 29, 2016

SoundCloud Starts Subscription Plan, Taking On Spotify and Apple

                              The popularity of music streaming services coupled with SoundCloud’s increasing drop in profits due to their lack of a direct income source has forced them to adopt a new paid subscription service called SoundCloud Go.  This service is $10 a month is meant to compete directly with Apple Music and Spotify.  This new two tiered system will allow free members to listen to a select number of an artist’s songs, while a paid subscriber can listen to the entire discography.  I think this shows that not every online business can operate like Facebook or Snapchat, meaning no paid user base and relying only on ads.  SoundCloud only made money on hosting fees and a very tiny amount of advertising.  As of 2014, it had a net loss of $44 million.  Most companies will need to charge a fee for it’s product, this is something not even the digital age can fully do away with.  Secondly, this subscription service legitimizes SoundCloud, and strikes a blow to the music sharing community.  Soundcloud was often in disputes with record labels over the legality of their music hosting model.  Now, with a paid subscription that allows over 125 million songs, SoundCloud is moving more towards a standard music hosting service, which pays more in royalties than the previous model.  Lastly, this creates a market for new users, but also could alienate their existing user base.  Many went to SoundCloud as an indie music host, free of record label interference.  Now, with a wider range of songs thanks to the record labels, independent artists may be reluctant to have their music hosted on the app.  I think this article could have talked more about how this change would affect SoundCloud’s users, and whether this would ultimately be good for the service.  I think the article does a good job emphasizing how crowded the music streaming market is right now, so it would have been nice to see how this could affect SoundCloud, and if it will affect it.  In Conclusion, this is a bold strategy for the company, as it deviates from it’s own norm, possibly to such an extent that it alienates its users, but not the norm of the industry.     



  1. I think it is really interesting that SoundCloud is going to start allowing people to have paid subscriptions. I currently pay $5 a month for a student Spotify account. I find that Spotify is really worth paying for because it allows me save songs, making them accessible offline, therefore using less data on my phone. From what this article says about SoundCloud, it doesn’t seem like you are getting any added features like that by paying. Instead SoundCloud makes some of the songs only available to those who pay, while Spotify makes all music available to free subscribers, but they have to listen to ads.
    I don’t use SoundCloud often anymore, but when I used to use it, I mostly looked up remixes to songs. I think SoundCloud will struggle to keep their users because they moving more towards a standard music hosting service. Many who use SoundCloud use it because it is not a standard music hosting service, therefore they aren’t going to want to pay for it to become just like Spotify and Apple. I also think many who want a standard music hosting service are going to stick to Spotify or Apple, rather than starting to pay for SoundCloud Go.

  2. Kyle, I think you make an interesting point in saying that Sound Cloud is alienating its users. As an avid Sound Cloud user, one of its major appeals was that it was "free of record label interference", and by moving to a format that not only enables more record label involvement, but intact encourages it will defiantly drive some away from the site. Sound Cloud is very diffrent from popular music streaming sites such as Spotify in that you can find very obscure remixes of songs or artists trying to get their music out on the internet for people to discover. This unique platform allowed for people to regularly use Sound Cloud in addition to a streaming site that required payment, because the listener was getting a different experience. By now allowing record labels and well know artists to host there music and charge money for it on Sound Cloud, I believe people will move away from using it all together and stick to using a streaming service they have already subscribed to, as apposed to having to create an new playlist or library of songs on a site that has moved so far away from what made it so popular.

  3. I think it is very interesting that SoundCloud is competing against large brand names like Apple and Spotify. The company is also competing against Pandora and other music apps that are available to consumers. The eye catching feature to SoundCloud are the song covers and the fact that users can record their own version of a song if they wish to. I think the biggest appeal to it, is to listen to the remixes or the original covers of songs, rather than listening to the actual artists. I think that most people who use this are using a free subscription, rather than paying for a premium version.
    It will be very interesting to see how well their profits are compared to those of Spotify or Apple. It will also be interesting to see the response of this change from current SoundCloud users. Since this seems like a drastic change than what some are used to, it would be interesting to see if they continue to use it, or if they will decide to change to a different company. Music is very important to people. It is a way for them to communicate and express themselves, it may even be therapeutic. That being said, most people will look for the best access to the genre of music that they like, as well as the availability to that source of music. By altering SoundCloud’s image, it might deter current users which could potentially reduce their profits. It will be interesting to see how the company progresses with these changes, and how they will handle the outcomes of their decisions.


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