Web Summit was this past week in Dublin. I’ve been watching some of the video from the conference and I thought this discussion David Carr hosted about the future of content was particularly good.
Posts from Music
Eric and his business partner Alex started SoundCloud in 2007 (I think). Seven years later, they run one of the largest audio streaming services in the world. In this interview, Eric talks about how SoundCloud is building a business around the largest audio sharing service in the world.
When we had a break in our meeting, I replied and said “No, but I saw the buzz on the feature on Twitter” and then asked him to Kik me a Tweet I could look at on my phone.
He kik’d me this one and I played it on my phone from inside Twitter (open that link on your phone in Twitter if you want to see it in action).
The really cool thing about this new card is you can minimize the SoundCloud card (like you can minimize a video on YouTube) and then keep listening to the music while you move away from the tweet.
That’s a big deal because most SoundCloud tracks are 2-5mins long and you wouldn’t want to keep that tweet open on your phone for 2-5mins if you could avoid doing that just to hear the entire track.
Apparently this feature (called Twitter Audio) will be available to other audio partners. This is a great move for Twitter and a great thing for SoundCloud and other audio companies too.
For creators, there are three offerings, Partner, Pro, and Premier. Anyone can be a Partner. For a small monthly fee, you can upgrade to Pro. And if you are really serious, then you can become Premier and make money on SoundCloud.
Every time you see or hear an ad, an artist gets paid
There will also be a subscription offering that will be ad free and offer other features for listeners.
For brands, SoundCloud becomes a popular social platform where they can engage with creators and listeners. Here’s more on SoundCloud’s offerings for brands.
Here’s the thing that many people miss about SoundCloud. It’s not like iTunes, or Spotify, or Pandora. It’s a peer network with a social architecture that emphasizes engagement and sharing.
Like Twitter and Tumblr and a number of other popular social platforms, SoundCloud treats everyone as peers in its network. My profile is almost identical to an artist’s profile on SoundCloud. I can do the same things they can do and they can do the same things I can do. The same is true of a brand’s profile.
This social architecture encourages engagement, sharing, commenting, and favoriting. It’s like the artists, listeners, and brands are all hanging out together at one big party.
These social peer networks treat advertising very differently. The ads are native. On Twitter, the advertising is a Tweet. On Tumblr, the advertising is a post. On SoundCloud, the advertising is a track. You see the ads in your feed and you choose to engage with them if they are inviting. In the best case, you enjoy them so much that you favorite or reblog/retweet them. And brands can sponsor/promote tracks from other users. Think of Red Bull sponsoring and promoting artists on SoundCloud.
The New York Times has an article today about On SoundCloud. It covers all the challenges that SoundCloud has overcome in getting to this place. It’s been a ton of work for the team at SoundCloud to get this launched, and there is certainly a lot more ahead of them as they undertake to get every artist On SoundCloud.
I am very optimistic that will happen because this network of 175mm mobile listeners all over the world connected together and sharing the audio they love with each other is too powerful to ignore.
To add SoundCloud to your Sonos system, you simply visit ‘Add Music Services’ in the new Sonos app and add it to your music services. SoundCloud tracks are also now available in the universal search feature in the new Sonos app.
We have had the unofficial SoundCloud hack for Sonos running on our systems for a long time now but it was a bit wonky to set up and it was not included in universal search.
If you want something to listen to this morning on your Sonos, you can try listening to my favorite tracks on SoundCloud.
But I’d like to take a second to tell the story of Songza as I know it. I am sure there are lots of parts of this story that I don’t know but the parts I do know make for a great story and now is a good time to tell it.
A few Brown University students had a great idea in 2006. They felt that mp3s should be priced based on demand not on a fixed price. So they started a company called Amie Street and built that service.
I first met them at some point after they had graduated from Brown and moved to NYC. I liked the idea a lot but was hesitant to invest. Others were not and they raised some money and chased that dream.
At some point Amazon got involved, I think as an investor. The Amie Street model ultimately did not pan out and in 2010 it was sold to Amazon. I don’t know the terms of that transaction but it did allow the team to stay together and work on a something else.
Long before the sale to Amazon, in October of 2008, Amie Street acquired Songza, a music app that was built by Aza Raskin and Scott Robbin.
After the sale of Amie Stree to Amazon, the team focused on Songza and iterated on it for a few years until they landed on the concierge user interface that helped popularize Songza.
I started using Songza in early 2012 and have been actively using it ever since.
I have three modes for listening to music and a primary services for each.
But back to the story of Songza. Over time Songza built a popular music service and they raised some more capital in the fall of last year. We spent some time with them during that process but we were already knee deep in online music with Turntable (RIP) and SoundCloud.
Every interaction I’ve had with the Songza team has been fantastic. They are great people. And every interaction I’ve had with the Songza service has been equally good. Which furthers my view that great people build great products.
I wasn’t surprised to see that they sold to Google. The streaming music business is hard. And the big platforms understand that music is a great audience builder and retainer. And Google has been a great home to great products (YouTube, Android, Nest, etc).
So that’s the end of my story. It has a happy ending.
If there is a moral to this story it is that tenacity pays off. The Songza team graduated from college eight years ago and worked on two separate services over that time with a fair bit of success and failure. They hung together and built something that is very good. And they got a good exit. As JLM would say “well played.”
More and more artists are embracing social sharing platforms like YouTube (video), SoundCloud (audio), Wattpad (storytelling) to get their works out and connect with fans. We have invested heavily in this category and both SoundCloud and Wattpad are USV portfolio companies. Another benefit of these platforms is you can use your followers/fans on these platforms like a panel. If you assume that the millions of followers you have on SoundCloud are more or less a representative sample of your entire fan base, then their behavior is more or less a reflection of the behavior of your entire fan base. If they like a new song a lot, it will probably be popular with your entire fan base. If they aren’t so excited about it, then maybe it won’t be a hit with your fan base.
SoundCloud announced a new feature for creators today that is a great example of this. It is called “Top Cities”. This is how SoundCloud describes it:
Plan your next tour, release strategy, and get better at connecting with your fanbase, by knowing exactly where they are — just click the ‘Top cities’ tab in your stats dashboard.
I recall seeing startups crop up from time to time where this was the entire business plan – figuring out where artists fans were so they could plan a tour. It turns out it wasn’t a great business. But I do think its a great feature. And just one example of how you can turn your followers on social sharing platforms into a panel that will allow you to understand them and connect with them better.
The other day we gave a friend of my son a ride from one side of Park City to the other. While I was driving, my son and his friends were chatting about the state of hip hop in Salt Lake City. Turns out another of my son’s friends met a local hip hop artist in the SLC airport earlier this week. They got to discussing this local hip hop artist. My son’s friend said “he’s very under the radar right now, he only has a couple hundred SoundCloud followers.”
Contrast that with Lorde, who emerged as an “under the radar” artist on SoundCloud a few years ago. Lorde now has almost 2.8mm followers on SoundCloud.
This phenomenon is certainly not limited to SoundCloud. Follower counts on Twitter have been a thing from the earliest days of Twitter. Subscriber counts on YouTube matter to emerging video artists. Follower counts on Wattpad matter to emerging writers.
The comment about the local hip hop artist got me thinking that for emerging artists, follower counts on the platform of choice for their media type might be the most important metric to asses the state of their career. It certainly sounded that way coming out of my son’s friend’s mouth. Under the radar means less than 1000 followers. Emerging means 1000 to 10,000 followers. Breaking out means 50,000 to 100,000 followers. More than 500,000 followers and you have arrived. More than 2.5mm followers and you are a superstar. Something like that.
Maybe follower counts are the new Billboard, Variety, etc of the entertainment and media business. It certainly seems that way.
I've frequently said on this blog that emergent behavior in a service is a sign to me that the service is scaling into something important and valuable. It is a feature that we look for a lot in our investments. I don't love it when entrepreneurs build services that are too tightly constructed around a single use case. I do love it when entrepreneurs build services that the users can take and do interesting things with.
Our portfolio company SoundCloud turned five years old yesterday. To celebrate they posted this 6 minute clip where 5 soundclouders tell their stories. What I like so much about this is that each of the 5 soundclouders have very different talents, very different use cases, and very different stories. Happy Birthday SoundCloud