By Steven Masur (June 7, 2012)

Why Should We Care About SoundCloud?

SoundCloud is a glimpse at what the future of music looks like. Here’s why. You can do anything on SoundCloud, and SoundCloud can do anything. In order to get the full width and breadth of SoundCloud’s opportunity, you have to look at YouTube, not Spotify. In the same way that YouTube is not a video service like Netflix, Soundcloud is not a music service like Spotify. YouTube is a place to experience and share all types of video, from the intensely personal, to the major commercial release. SoundCloud does this for sounds.

Those sounds can be anything from a recording of a broken water fountain that makes a nice beat (, to a great new artist sharing music for free in order to make a name for himself (, to a major artist sharing a sample in order to promote an album or live tour (, to the same artist offering sets for sale ( Soundcloud can be used as everything from a music service, to a collaboration tool.

Furthermore, SoundCloud is frictionless and on track to become ubiquitous. If you put me in a room with 30 people each with a different device, from laptops, to mobile phones, to set top boxes to tablets, I can have all of them playing and recording sounds from SoundCloud in 5 minutes.

So is it just people stealing music, or terrible self-releases you don’t want to hear? No, I don’t think so. It’s actually great as a music service. If you take half and hour to “follow” a few people you like and save a few good things to your favorites, you can pretty much hit play and SoundCloud will do the rest, like Pandora, but with far less obvious musical references. With Spotify, if you hit play without spending a few hours setting yourself up with some great playlists, you can easily end up with the greatest hits of a Clear Channel commercial programmer.

Staying Perfectly Legal vs. Making Money for Artists

Is SoundCloud perfectly legal? No, but neither is YouTube. Nobody ever did anything great without taking some risks and changing the way people think about things. SoundCloud has some major IP hurdles to overcome. The crushed revolts throughout human history show that the incumbents are never excited about change. But SoundCloud can make everyone’s experience of life richer and if you are in the business of selling music, it can make you lots of money.

…but some industry players are going to be disintermediated. It is no longer going to work for the law to support populations of people who no longer add much to the value chain, and technically just cost artists money. SoundCloud adds value, and transfers it directly to the artist in two ways, viral promotion, and direct access to fans (and their money).

Viral Promotion

When you upload a track to SoundCloud, anyone can listen to it, comment on it, and share it with friends on any device. They can pinpoint the exact part they like, and say why they like it. They can follow the artist and check out what the artist is listening to. They can follow other people following that artist, and check out what they like, whether the person responds to their friend request or not. It is all based on musical integrity; sharing what you like with others.

In this way, SoundCloud is the college to Spotify’s middle school.* Spotify has “everything.” Well, everything you can license from a major label. SoundCloud has everything there is, not just what the industry is shilling. It is a multidimensional ecosystem of trash and treasure.

For me, new music has to be a little dangerous to be compelling. It has to push the envelope. Most music services lack this dangerous Wild West component. They are the ABC, NBC and CBS to Mixcloud and SoundCloud’s Vimeo and YouTube. Anyone can upload onto SoundCloud, but in order to get on Spotify, you need to be “somebody.” You’ve got to have some traction, commercial heft and be represented by a known label. Indeed, in order to continue to offer a compelling subscription service, Spotify must actively keep its offering clean and free of the sort of crap on which SoundCloud thrives. As a result, these services complement each other.

But the real difference for artists is that with Soundcloud and Mixcloud, you don’t need a label, or anything else. You just upload your stuff, start promoting and you can make money.

Let’s Make Some Money

Direct access to fans really is such a beautiful thing. You can develop a dialog and relationship. You can find out what they like by hearing from them directly, and in an extremely granular way, down to the 100th of a second in your track, adapt your music, make it better and re-release. You can answer the question, “what makes a good DJ or artist good.” Your followers are telling you what’s good or not.

Money. Unfortunately for artists, these are still early days, SoundCloud is new and it is still defining itself. Like nearly every music service that has preceded it, there is a something of a cooler than thou attitude to the management, and you’re not quite sure who they are going to piss off. This, of course, is common in both music and technology, we’ve all seen it before, and we hope they don’t get sued out of existence, like so many of their predecessors. But on a fully evolved SoundCloud, you could:

– stream your track for free to give people a “taste”, without giving them the whole meal

– Allow users to download MP3s of tracks you want to give away

– Allow users to download and PAY for tracks you don’t want to give away

– Allow users to download and pay for whole albums, collections and mixes

– Promote your live shows

– Promote your merch

– *Create advertising and sponsorship supported pages, without ruining the “free” experience enjoyed by everyone else

– *Upload full radio shows containing work from various artists, such that each artist gets the promotion AND can sell their tracks and albums with referrals directly from the radio upload.

– Stream 24 hour fully ad-supported radio just like the terrestrial radio stations, in fact existing stations could stream themselves on SoundCloud for a rev share.

What Makes SoundCloud Different?

OK, so anyone can compete with SoundCloud with ubiquitously available software, so there are, of course, tons of competitors. But most of them live within the confines of the streaming compulsory license. So the user experience is like SoundCloud lite. You can’t upload, you can’t collaborate, you can’t even rewind. So you’re just a fan, you have to stay in your box and take what you deserve. But at least you’re legal. What about the legality of SoundCloud? Like the state of the law, and a good Minute Men song, I will stop writing with this question left unanswered.

*Footnote: In middle school, I listened to KISS, Van Halen, Led Zeppelin, The Doors, Foreigner, Bad Company, Crosby Stills Nash and Young, Cat Stevens, Iron Maiden, etc. To me, that was “everything.” In high school I branched out into DEVO, Flipper, Black Flag, James Brown, Parliament Funkadelic, Oingo Boingo, the Sex Pistols, David Bowie, Bob Marley, The Grateful Dead, yada, yada. But in College? Forget about it. I devoured anything you threw in front of me like a starving animal, not just what major labels were releasing. I would burn through all the CMJ offerings and promos that got sent to my college radio station, then range around trading tapes with strangers, from Brazilian funk, to African rock bands from the 1970s, to Navaho chants, to Indian tabla and sitar tracks, to strange Asian stringed instrument sounds. OK, NOW I was listening to everything. That’s what SoundCloud allows you to do, only without working quite as hard.

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