SoundCloud

SoundCloud. SoundCloud is a global online audio distribution platform and music streaming service that enables its users to upload, promote, and share originally-created sounds. Founded in Berlin by Swedish sound designer Alexander Ljung and Swedish artist Eric Wahlforss, the platform has become a pivotal hub for independent artists, DJs, and podcasters to distribute their work. It is distinguished by its social networking features, such as waveform commenting, and has played a significant role in the discovery of new musical talent and genres.

History

The concept for SoundCloud was developed in 2007 by co-founders Alexander Ljung and Eric Wahlforss in Stockholm, with the company officially founded later that year in Berlin. Initially conceived as a tool for musicians to share recordings with each other, it quickly evolved into a full-fledged public platform. A pivotal moment came in 2009 with the introduction of its signature waveform visualization and time-based commenting system. The company secured significant venture capital funding from investors like Union Square Ventures and Index Ventures, enabling rapid growth. In 2014, it was reported that Twitter had considered an acquisition, but instead led a large funding round. Facing financial difficulties in 2017, the company underwent a major restructuring, with new investment from The Raine Group and Temasek Holdings, leading to the appointment of former Vimeo CEO Kerry Trainor as its chief executive.

Features and services

The core functionality of SoundCloud allows users to upload audio files in various formats, which are then displayed with a visual waveform. A defining social feature is the ability for listeners to post time-specific comments directly onto this waveform, facilitating direct feedback. The platform supports the creation of playlists, both public and private, and offers extensive sharing tools integrated with Facebook, Twitter, and Tumblr. For creators, it provides basic analytics through its SoundCloud Pro and SoundCloud Premier tiers. In response to the growth of competing services like Spotify and Apple Music, SoundCloud launched its subscription service, SoundCloud Go, in 2016, offering offline listening and an expanded catalog. The platform also hosts a vast array of DJ mixes, electronic music, and hip hop music, often serving as a first point of release for new tracks.

Business model and financial performance

SoundCloud operates a freemium business model, generating revenue through advertising on its free tier and its subscription services, SoundCloud Go and SoundCloud Go+. It also offers paid upload plans for creators under the SoundCloud Pro umbrella. The company's financial history has been turbulent; while it achieved rapid user growth, it struggled for years to achieve profitability. Significant losses were reported in the mid-2010s, leading to layoffs and a near-collapse in 2017. The emergency funding round from The Raine Group and Temasek Holdings that year involved a change in ownership and a drastic reduction in staff. Since the restructuring under CEO Kerry Trainor and later Eliah Seton, the company has focused on stabilizing its finances, reporting its first profitable quarter in 2020 and emphasizing partnerships with major record labels and rights holders.

Impact on music industry

SoundCloud has had a profound democratizing effect on the music industry, lowering barriers to entry for artists without traditional record label backing. It became an essential incubator for genres like cloud rap, lo-fi music, and various electronic dance music subgenres. Many prominent artists, including Post Malone, Kehlani, and Lil Uzi Vert, first gained traction on the platform. Its repost and sharing features fostered tight-knit online communities and enabled a new form of A&R, with scouts from labels like OVO Sound and Atlantic Records actively searching for talent. The platform's influence extended to radio, with shows on BBC Radio 1 frequently featuring tracks discovered on SoundCloud, and it fundamentally altered the pathway to a professional music career.

Controversies and legal issues

SoundCloud has faced ongoing legal challenges primarily related to copyright infringement on its user-uploaded platform. It has been the subject of numerous takedown notices under the Digital Millennium Copyright Act and has engaged in protracted negotiations with major record labels and publishing groups like Sony Music Entertainment, Universal Music Group, and Warner Music Group. These conflicts led to the removal of large amounts of user content and temporary bans in certain territories. The company has also faced criticism from its own creator community over changes to its monetization policies, the introduction of its subscription service, and the perceived favoritism towards major-label content. Furthermore, its 2017 financial crisis and subsequent layoffs sparked significant concern within the music industry about the platform's long-term viability.

Category:Audio streaming services Category:Music websites Category:Companies based in Berlin