Feb 24, 2016
Hey, remember that awesome indie band you found on a blog? They only had a few plays on SoundCloud back then, but boy, oh boy did they blow up!
Everyone was blogging about them. They started filling out bigger venues, got booked to play a big music festival, and then they signed an awesome record deal!
Too bad they're getting screwed over now.
A little bit of history
Back in ~2010, SoundCloud changed the game when they introduced embeddable widgets and API streaming.
It allowed thousands of music blogs to shed themselves of the ever-present fear involved with MP3-hosting, and in doing so flipped the industry on its head. Blogs flourished, and so too did the bands who were fortunate to find themselves sucked up into the fervor of the hype machine (quite literally, Hype Machine dominated).
This little "renaissance" within the music blogosphere was a godsend for music labels. The job of finding new talent (A&R) became a whole lot easier -- essentially, all they had to do was monitor the Hype Machine charts and a few buzzworthy blogs.
With this new-found ease-of-discovery, major labels like Universal Music Group (UMG) signed a bunch of up-and-comers who were picking up massive traction through 1) the ease of distribution via SoundCloud; 2) the democratization of the internet and the fact that everyone and their mother was now a music blogger.
Cool. So what's changed in the last few years?
Shitloads! But here's the part that matters: streaming services, rather than blogs, have grown to become the major players in the listening game. These include Spotify, iTunes, YouTube, Rdio (RIP), Deezer, Pandora, Tidal and so on.
Their common thread? They all pay royalties on the streams (albeit sometimes minimal). And by bringing them all under their grasp, labels like UMG (who own ~30% of the world's music), Warner and Sony have posted healthy turnarounds in profit. Just this week came the news that last year saw UMG's highest revenues in a decade, largely attributed to streaming.
SoundCloud, meanwhile, hasn't been paying anyone anything. They've been too busy launching careers and simplifying the A&R game. Oh, and they also picked up millions of dollars in investment at a pretty nice valuation...
Okay, so where's it all going wrong?
SoundCloud recently struck a deal with UMG, which means artists under the label will allegedly be able to monetize their streams. Unfortunately this means that "unmonetizable" portions of SoundCloud are being shut off to these artists, and they don't really seem to have a choice. So far, everyone I've spoken to is having a nightmare of an experience when they try to opt out (this is anecdotal, by the way, based on ~20 conversations I've had in the last week with artists and labels whose songs had suddenly stopped playing on Indie Shuffle).
So, what are these "monetizable" parts of the website where UMG artists can still flourish? SoundCloud has been hinting at a subscription service for a while now, and as of last week, rumors have begun to circulate that the platform is taking major steps to prepare for that moment.
This subscription service will result in a paywall, behind which it's starting to look like all UMG artists will reside. In that scenario, anyone wishing to stream their music will have to do so as a subscriber to SoundCloud, and all API streaming will be disabled. And this decision might not just be coming from the labels: we've heard rumor that SoundCloud themselves are pushing for it just as hard.
(As an aside, API streaming was a huge positive for SoundCloud: it's the primary method of integration for Indie Shuffle, Hype Machine, HillyDilly, and a bunch of others).
If streams outside of the paywall are off-access, it means that an artist is signed to UMG or one of its subsidiaries can no longer be featured on any of the major blogs, and many more like them. Of course, this has tremendously bad consequences for artists who rely on SoundCloud as a major source of both career progression and community attention.
If UMG artists are going behind a paywall on SoundCloud, it means they won't be able to spread their music on the blogosphere, right?
Right.
The way it's shaping up, UMG artists (as well as Sony and Warner) cop the short straw of this deal. If all parties involved do indeed roll out a paywall that prevents API streaming, we won't be able to share their music.
It doesn't just suck for the artists. At Indie Shuffle, preparations for this paywall have already caused around 30% of our streams to break. But while I might sit here and complain, my belief is that it's far worse for the artists who built their careers and audiences on SoundCloud, and for those who thought a record deal meant they'd made it.
Ultimately, the very acts that UMG signed because they hit #1 on the Hypem Charts will be left wondering why no one's blogging about their new album.
Oops.
...Why would UMG do something like this?
What does this mean for the listener?
Well, you can always turn to Spotify and YouTube and so on. Of course, that assumes that those services are available, considering that each has its own battles with a variety of labels. Realistically, one needs to use at least 4 - 5 different streaming services to access all music from all labels and artists - predominantly SoundCloud, Youtube, Spotify, Apple Music and Pandora, plus Tidal for The Life Of Pablo.
Sure, we're not suggesting that 100% of music existed on Soundcloud before - but a hell of a lot more of it sure did.
In terms of listeners who find their music via blogs like us, it really depends on the people who support us. Will our audience continue to look for *new* music and artists, or will they turn to platforms like Spotify and YouTube who can offer the latest release from their favorite bands?
More likely than not, it'll lean toward the latter.
Is there a light at the end of the tunnel?
Absolutely. In fact, while this is really bad news for UMG artists (and Sony and Warner), as well as the blogs who love them, this is actually really good news for undiscovered artists.
Indie Shuffle and similar API-powered platforms won't be able to cover the established groups. Instead, we'll have to find acts who aren't yet blocked from forms of streaming. And so, we'll give them more exposure. Yay!
Image credit: Bug Squad.