SoundCloud

Market position

SoundCloud is described as one of the largest music streaming services in the world, serving 190 countries and territories, and it emerged as a challenger to Myspace as a platform for musicians to distribute their music. It operates alongside Berlin's cluster of music technology companies such as Ableton and Native Instruments. Its scale has attracted acquisition interest from Twitter (reported 2015) and Spotify (2016), neither of which proceeded.

Compared with other streaming services, SoundCloud is an interactive platform where listeners can comment on and engage directly with tracks, which supports artists building audiences from the platform itself. It combines open self-serve uploading and distribution for unsigned and independent creators with catalogue from established artists, and offers embeddable players and audio cards for sharing tracks across the web. In 2014 Rolling Stone placed SoundCloud first on its list of "24 Inventions That Changed Music".

Technology

SoundCloud runs a web and mobile streaming platform written in Ruby, Scala and Clojure, with a browser-based player that requires JavaScript, an embeddable player and audio cards for sharing tracks off-platform, listener analytics and messaging tools, and a mobile app for creators.

Go-to-market

SoundCloud acquires creators through free self-serve uploading and converts a portion to paid Pro plans, while distributing listener-facing content through its website and mobile apps and through embeddable players and audio cards placed on blogs and social platforms. Partnerships with content partners, independent labels, YouTube multi-channel networks and rights holders (including Warner Music Group) support advertising and royalty monetization, and the 2019 acquisition of Repost Network added artist distribution capabilities.

Independent and emerging musicians, DJs, podcasters and established mainstream artists seeking to distribute audio and connect with fans, alongside listeners streaming music and podcasts; content partners, labels and advertisers on the monetization side.

Geography

Headquartered in Berlin, Germany, with a country of origin of Sweden, where the company was established in Stockholm. The service is available worldwide, in 190 countries and territories. SoundCloud also maintains a New York City office, which moved in January 2024 from 71 Fifth Avenue to a 23,000 square foot space at 2 Gansevoort.

History

SoundCloud was established in Stockholm on 27 August 2007 and its website launched on 17 October 2008; the company was built and grown in Berlin. It raised a €2.5 million Series A from Doughty Hanson Technology Ventures in April 2009, a reported US$10 million Series B from Union Square Ventures and Index Ventures in January 2011, and investment from Ashton Kutcher and Guy Oseary's A-Grade Fund by mid-2011. A US$60 million round preceded a January 2014 announcement that the company had begun licensing negotiations with major music companies over unauthorized copyrighted material. In December 2014 it was reported the company could raise about US$150 million at a valuation above one billion dollars. Twitter was reported in May 2015 to be considering an approximately US$2 billion acquisition, and Spotify said in September 2016 that it was considering buying SoundCloud before reportedly abandoning those plans in December 2016. SoundCloud acquired Repost Network in May 2019, and a US$75 million investment by SiriusXM was announced in January 2020. Co-founder Eric Quidenus-Wahlforss stepped down from running the company in 2019 and later co-founded the Berlin e-bike subscription startup DANCE with Alexander Ljung. In January 2024 the company moved its New York office to 2 Gansevoort.

Risks & controversies

SoundCloud has faced persistent licensing and rights issues: unauthorized copyrighted material appearing on the platform prompted the company to begin negotiations with major music companies in January 2014, and its inability to secure deals with major labels was cited as a factor in the failure of the reported Twitter acquisition and in the collapse of the planned Twitter music app. Some major labels remained skeptical of its business model when new financing was reported in December 2014, and concerns over revenue from the Premier program were raised on the label side. The company was reported to be only approaching break-even as of December 2021.