Sep. 20th, 2017
SoundCloud Down, But Not Out Yet
A $170 million investment has saved SoundCloud from a Q4 bankruptcy and has “[ensured] a strong, independent future”… for now.
When the news broke in July that the music-streaming service had laid off 40 percent of its staff, SoundCloud users panicked. Reports by TechCrunch painted a desperate picture for the company, with offices in London and San Francisco shutting down. Employees described the office as a “shitshow” as founder and (former) CEO Alex Ljung partied—seemingly unaware of the sinking ship that SoundCloud had become.
In 2009 Myspace bought the music and video streaming service, imeem and its 16 million users. Yet the service still fell off, resulting in the loss of all music uploaded to the site.
With investments from The Raine Group, a merchant banking company, and Temasek, a Singapore-based investment company, the company’s valuation has dropped from the reported $700 million of nearly a year ago, to $150 million today. The new investment also drops previous investors preferences by 40 percent and “supposedly gives Raine and Temasek liquidation preferences that override all previous investors,” according to TechCrunch.
Ljung has stepped down from his role as Chief Executive Officer, but retained a seat on the board as chairman. Co-founder Eric Wahlforss became the Chief Product Officer. Former Vimeo CEO, Kerry Trainor now fills that position moving forward. Trainor, who was able to secure Vimeo’s future despite fierce competition from YouTube, will hopefully infuse the music company with some of his tech-company magic.
SoundCloud, while out of hot water for the moment, will need to make some important changes and improvements to maintain its future as an independent company. Giants like Spotify and Apple Music became profitable through their subscription tiers and SoundCloud will likely need to adopt a similar strategy. The company currently offers Pro and Pro Unlimited subscriptions which cost creators $7 and $15 per month, respectively. SoundCloud guards its numbers (three years ago they reported 175 million active users) but it’s clear they’ll need to up the number of paid-members to keep the company afloat.
— Alexander Ljung (@alexanderljung) August 11, 2017
So, what would happen if the user-driven platform were to go under?
The possibility isn’t as remote as SoundCloud’s independent artists might have hoped. Raine and Temasek maintain liquidation powers. For non-business majors, the process of liquidation is the conversion of assets into cash to wipeout company debt. A non-profitable SoundCloud could see it go the way of Vine—another platform that died despite an enormous outcry of support from its user-base. It could also be acquired by a larger streaming platform and its users pushed over (similar to what happened to Cingular customers when the company was bought by AT&T).
SoundCloud has managed to foster new subgenres of music, like “SoundCloud rap.” Chance the Rapper benefited hugely from the rise of the online music culture and spoke out—as many other artists did—in fervent support of the platform. But this isn’t the first time a music-streaming service has faced its own death. In 2009 Myspace bought the social streaming service, imeem and its 16 million users. Yet the service still faltered and died, resulting in the loss of all music uploaded to the site.
TechCrunch reporter Josh Constine interviewed Ljung and Wahlforss previously, noting “neither had answers to the big questions facing SoundCloud about its product direction, business model and the spurious copyright takedowns that have eroded its trust with musicians.”
Ljung did not comment about the “death watch” SoundCloud has recently been forced to face, he spoke to Billboard about “the ‘big gaping hole’ that would be left in the music world should the service disappear.”
Says Ljung, “There is only one SoundCloud. It’s unique. We just closed out the first decade and created a really unique platform that impacts global music every day. I’m really excited about the next decade.”
How do I secure my music?
There are a number of free options available to artists and listeners using SoundCloud. The Google Chrome app store hosts more than a few options (chrome.apps is the highest rated download). The app is “an easy to use Chrome extension that simply adds a download button to all SoundCloud tracks, so you can download your favorite sounds quickly and easily.” Conveniently, they have an option to download entire playlists.
If you don’t have Chrome, find a site online that let’s you convert online files to mp3’s. Be careful not to expose your computer to viruses, but these sites are often an easy way to get your tracks. Most often, they use the song’s URL to download.
Bandbasher will also release an all-in-one button to import your tracks, track art, and profile data–without losing a byte. Log in or signup to get the most up-to-date features and help further your music career.
Header/Cover image credit: SoundCloud logo design by onlab.