SoundCloud are the latest online streaming service to announce plans for monetisation, prompting disquiet amongst users. But given the multitude of developments in the world of streaming platforms recently, this news shouldn’t come as much of a surprise.
Remember that SoundCloud are the second largest free online music service behind YouTube and until now have avoided paying a penny in royalties. With pressure building on SoundCloud and their competitors, it was inevitable their strategy would change.
Looking back
The first sign of change was when SoundCloud began to facilitate the removal of copyrighted material. They introduced a feature which allowed labels and individuals to flag infringing content and saved themselves from having to scan every new upload. The move was a step in the right direction but disadvantaged small labels without the resources to be constantly vigilant, as well as uploaders whose mixes and mash-ups were removed with little to no warning. Most longstanding users were left frustrated by the drop in functionality.
As we reported recently, SoundCloud eventually submitted to label pressure and began negotiations to properly enforce DMCA takedown notices and facilitate the collection of royalties.
At the time we speculated that this was to avoid court action at a crucial point in their development. It has since become clear, though, that SoundCloud’s course has been set for some time toward a different business model, one that focuses less on uploading and more on connecting fans with music. It seems that the decision was forced not by fear, but by affordability.
The future for SoundCloud
Recently in an interview with The Guardian co-founder Eric Wahlforss hinted at a variety of ideas the company has to make the service profitable. He said: ‘Right now in the US we’re experimenting with different monetisation approaches. We’re testing out different things: throwing a couple of things out there and testing the waters a bit. We’re super-excited about where this stuff can go.’
Although they have nothing like the financial backing of a giant like YouTube, SoundCloud are still a heavy weight contender in 2014’s race for the world’s first profitable streaming model.
The reaction
A glance at various comment sections shows opinion is split on the issue. Clearly this is a debate which will rumble on without conclusion for a while yet.
Ultimately, ever since illegal downloading gave consumers free access to music without reproach, the music industry has struggled to convince people that music still has a monetary value. Free and unrestricted services like YouTube and SoundCloud were only ever going to be a temporary fix for the problem.
Now these services who built themselves on the promise of unrestricted access have to readjust if only to pay those musicians whose wares they’ve exploited for so long. As Eric put it ‘When you have millions of followers and millions of listeners, you’ve got [a] point expecting there to be some sort of monetisation there. We hear that loud and clear.’
The music industry is evolving so quickly at the moment that it’s very difficult to clearly predict what will happen next. Will SoundCloud’s existing user base migrate? Or will consumers come to accept the cost attached to streaming?
There’s nothing we can do but stay optimistic. After all, music will always exist in some form and corporations, independent companies and consumers alike will eventually adapt. Certainly we shouldn’t be averse to change and innovation. Hopefully we’ve learnt by now that swimming against the tide in the music industry can only last so long.