Jan 15, 2016
As many of you may already know, SoundCloud just recently came to agreement an with Universal Music Group regarding the label's massive catalog. Sony may very well be next in line. In my mind, this means both good and bad news.
Summary:
SoundCloud won't die. Major labels will get the money they want. 3rd-party services like Hypem, 8tracks and Indie Shuffle will continue to have a "limited" API selection. Good news for small artists. Bad news for big artists.
The good news:
SoundCloud isn't going away any time soon. Their ranks will be bolstered by UMG's massive collection of music, and on top of that, fledgling producers may once again be able to upload remixes and edits of works by UMG artists without facing "strikes."
Major labels will start to get the money they feel they deserve.
The so-so news:
Along with the announcement came hints that SoundCloud is going to shift toward a "freemium" model. This means that listeners will have two options:
1) Deal with audio and visual advertisements (hopefully of a high quality); or
2) Sign up for a subscription (likely $10/month, in-line with the market)
SoundCloud have a lot to gain from this approach. They'll be able to maximize revenue, and in doing so mature into the company that investors envisioned them to become. Similarly, the labels will be able to capture "missed" revenue from the massive amount of streams on their website.
The bad news:
SoundCloud will struggle to monetize content that does not exist within their platform. As such, I have little doubt that the API service will suffer from their new policies. I expect that the already-existing ability to "enable/disable App streaming" for uploads will become a key decider in whether websites like Indie Shuffle, Hype Machine, 8tracks and HillyDilly will be able to continue streaming via SoundCloud.
Those labels and artists who decide to "disable" app streaming will block access by 3rd-party services, and in return hope that users will choose to listen to their music directly on SoundCloud. This "block" will also be likely to flow through to those producers who are mixing and editing artists from major labels. In turn, 3rd party apps will have a "limited" choice as far as which songs they can stream.
That limit isn't exactly new, though. At Indie Shuffle we're already limited in what we can stream. Songs by Disclosure, Lorde and St. Lucia, for example, are blocked by the major labels behind them. This forces us instead to focus on the new up-and-coming acts, which I suppose gets to the ethos of what we're all about: finding good new music.
Conclusion:
I'm thinking out loud here, but if things play out in a positive manner, the ecosystem will stay "as-is." 3rd party services will continue to be able to use the API on a limited basis, with major label tracks generally being off-limits.
In turn, we'll cast light on the up-and-comers, who will eventually be signed to major labels and ironically have their music blocked from 3rd party streaming (the method they used to gain attention in the first place). And so the cycle will repeat itself...