Digital Gabe
Cutting Edge Commentary On All Things Media

Signs Of Life At SoundCloud?

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You probably haven’t thought much about SoundCloud lately since the moribund streamer appeared to be on death’s doorstep in the middle of 2017.  However, thanks to a new round of investor funding and a reconstituted executive team, the German streamer appears to be making a comeback.

To understand SoundCloud’s path forward you need to know their history.  In 2008 SC originally launched as a music file-sharing service – think Napster 2.0.  However, a lack of royalty agreements always made their existence dubious.  Since they weren’t generating any revenue SC lurked in a licensing grey area for a while.  Then about 3-4 years ago they got serious about revenue.  In 2015 they started selling ads and in 2016 they came out with a subscription product.  In order to begin monetizing their service SC had to sign label-direct royalty deals to legitimize their content rights, just like every other streamer out there.  These royalty payments were far higher than any ad/sub revenue SC was bringing in, so those same label deals almost drove them out of business.

So where do things stand today?  SC is charting a slow and steady course to stabilize their business by focusing on the youth (12-24 yo) market.  In a recent NY relaunch event they positioned themselves as having the “Ear of the Youth” to a room full of marketers.  It sort of feels like they’re trying to be the Snapchat of streaming by going young compared to their larger competitors.  There’s no telling if this strategy will work, but at least SoundCloud is back at the plate to take their best swing.

 

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