On SoundCloud

Today, our portfolio company SoundCloud is announcing its content partners program, called On SoundCloud.

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.

For listeners, there will be two tiers. A free, advertising supported offering that values artists. As Alex Ljung, founder and CEO of SoundCloud says here:

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.


Comments (Archived):

  1. Andrew P

    Great move for the company and for the artists. It might be off topic but I love SoundCloud for ‘sets’ which is actually original content I can’t get anywhere else. I could listen to say Avicii’s album on iTunes or Spotify or I could also listen to his live set at a music conference or venue which I actually prefer as it’s a blend of a lot of music and perfect for exercise. It can take an existing product ‘live performance, original mix’ and monetize that for the artists. There a lot of this type of music that doesn’t fit the distribution model for the others and with artists now getting money hopefully it encourages it more. I will gladly be upgrading and paying for the service.

    1. Susan Rubinsky

      Right on! Me too. I want to support something where the artists get compensated. Love the mixes on Soundcloud.

    2. diymanik

      I actually think you’re right on topic. Those sets are my favourite feature on SoundCloud because it allows you to discover more artists than you possibly could on iTunes, Spotify or YouTube. I can’t count how many times I’ve been browsing through my feed and found an artist I’ve never heard of in a set and they’ve become one of my favourites. Sets are the key to SoundCloud’s discovery engine and the moves they’re making put them in a position to help those indie artists get discovered and paid and encourage more individual artists to use the platform as their own personal music label.

  2. jason wright

    what role might the blockchain have for the future of these peer to peer platforms and the companies that *own* them?

    1. pointsnfigures

      interesting questions, especially when you think about copyrights.

      1. jason wright


  3. LIAD

    Interesting that they copied Spotify’s model of allowing listeners to pay to remove ads, and not YouTube’s which doesn’t offer an upgrade for viewers to go ad-free. + from what I understand. Pro-listeners won’t listen to ads, even though they are the revenue model of pro-creators. Thus soundcloud’s revenue from pro-listeners comes directly at the expense of ad-money revenue pro-creators would have received had the listener not upgraded to pro.Am I right? If so, nonaligned incentives.

    1. JimHirshfield

      I have to imagine listener subscription revenue is shared with creators… No?

      1. LIAD

        dunno.commented off reading fred’s post and a quick read of the soundcloud post

    2. fredwilson

      the new YouTube Music Key does that

  4. Bruce Warila

    Audio is such a big pie. 7B humans times 16 hours a day is a lot of potential ear minutes. It’s unfortunate that the friction that comes with music licensing is such a tax on innovation. The goal of the music industry should be to increase total minutes (as a slice of the 7B*16 hours); there’s a lot of streams to be sold someday.I am hoping for inventions like ‘predictive listening’ that always puts the stuff I want, when I want it, into my ears (news, sports, music, calls from my wife, etc.).As an aside, one could argue that Apple is the biggest audio company on earth (ipods, beats, iphone, garageband, itunes, iphone, siri etc, etc.); Apple is always in our ears.

    1. JimHirshfield

      Ear share

  5. pointsnfigures

    I like Soundcloud because it allows me to discover. It’s been fun re-engaging with music. I need to work a bit harder to optimize it for myself. Ironically, because SoundCloud is steeped in Coase Theorem, the more I optimize it for myself, the more it gets optimized for everyone else.

  6. sigmaalgebra

    There’s a lot of content on the Internet, including music. For a person, finding content they like can be a challenge. E.g., for music, ‘search’ via keywords/phrases work at best poorly. ‘On Soundcloud’ looks like one way for a person to find music they like. There can also be other ways for people to find content, including music, they like!

  7. William Mougayar

    “Nothing is more powerful than an atomic unit of native advertising whose time has come.” — Victor Hugo (if he was still alive)

  8. JimHirshfield

    Speaking of music, I just finished reading Eric Clapton’s 2007 Autobiography. And here’s how the book ends…Keep in mind, this was 7 years ago…The music scene as I look at it today is little different from when I was growing up. The percentages are roughly the same – 95 percent rubbish, 5 percent pure However, the systems of marketing and distribution are in the middle of a huge shift, and by the end of this decade I think it’s unlikely that any of the existing record companies will still be in business. With the greatest respect to all involved, that would be no great loss. Music will always find its way to us, with or without business, politics, or any other bullshit attached. Music survives everything, and like God, is always present. It needs no help, and suffers no hindrance. It has always found me, and with God’s blessing and permission, it always will. – Eric ClaptonIt made me think of all the related conversations we’ve had on AVC on the changing music industry.

    1. Salt Shaker

      Not surprised by Clapton’s “prediction.” Virtually any artist from the 50’s, 60’s’ 70’s got screwed by their label, mgt. and/or publisher. Here’s a couple of nuggets about the Beatles, who despite their enormous wealth, still got screwed.–The Beatles initially only received 75% of a penny (18.75% each) in royalty payments on the sale of their music, while their mgr. Brian Epstein received 25% of a penny.–They gave away 90% of all rev on merchandising/licensing (that’s a shit load of lunch boxes).–On publishing rights, Lennon/McCartney each initially only owned 20% of their songs (Ringo/George 0%). The company that set up the pub deal, Dick James Music, received 50%, while Epstein received 10%. Subsequently, Northern Songs, the Beatles publishing arm, did an IPO in 1965 to avoid cap gains. John/Paul each got 15% of the issuing stock (worth $640K each), while George/Ringo received a very small %. Lennon/McCartney never owned their songs outright.

      1. LE

        What’s “getting screwed” exactly? These guys would be nowhere without that “screwing”. What’s fair given the risk involved or the machine that is setup to find and cultivate talent (or fix there teeth see the documentary on David Geffen and The Eagles for example). And who cares if it is even fair anyway? You get what you negotiate for. If you don’t know about it or have skills in that area the other guy will hustle you. I have no rights to believe I can win a basketball game or a pool game so I won’t play pool or I should be smart enough to get someone to help me with that. It’s not up to the other guy to be thinking what is best for you (in business).In particular, explain this a little further:–The Beatles initially only received 75% of a penny (18.75% each) in royalty payments on the sale of their music, while their mgr. Brian Epstein received 25% of a penny.Lastly, in the 60’s this was all at the start of things. Nobody clearly knew what the potential would be. Hence, people don’t make that mistake today.

        1. Salt Shaker

          Well, I guess it’s hard to really say the Beatles got “screwed” when each is (was) so enormously wealthy. Your post suggests a “buyer beware mentality,” which is gen pretty sound advice. But when a young, naive artist, as the Beatles certainly were, defers to their mgt. team for advice and guidance, the so called experts, and these alleged trustworthy individuals stack the deck in their financial favor to almost onerous levels, then that’s a prob.Jim references the Clapton book, which I too have read. If you read any autobiography of a successful recording artist from that era (or earlier) there’s a common thread of a lack of financial integrity at every step of the food chain. It’s still pretty bad, but nothing like it was.

          1. LE

            If you read any autobiography of a successful recording artist from that era (or earlier) there’s a common thread of a lack of financial integrity at every step of the food chainSure because they are mad at themselves for being stupid. There is also a commonality to not successful recording artists. They got nothing and wasted their life on a dream. Nobody reads or says anything about that. To me the people getting screwed are the 99.9% wasting time (and their life) pursuing something that is never going to happen. Not the .1% who anyone who would invite over for dinner to hang with. [1]But when a young, naive artist, such as the Beatles certainly were, defers to their mgt. team, the so called experts, for advice and guidance, and these alleged trustworthy individuals stack the deck in their financial favor to almost onerous levels, then that’s a prob.They were nobodies from Liverpool. Had someone not taken advantage of them they’d be nobodies in Liverpool today.Next, to be clear they also got themselves fucked up with things that were under their control because of the same “naive artist” thinking. Drugs and sex as two examples.The world after all is full of people taking advantage of young naive people (or old naive people) in many ways. And in most cases they don’t end up becoming famous either and there is no upside. (At least in the entertainment business they get some notoreity that can keep them employed, even if it’s just doing some party event or even at the casinos..)I think the attitude of the recording artists is similar to some startup founders or people in tech. “We are special. We are all very special” and they think it’s just ordained that they will be great and if anything comes in the way of them and things being totally in their favor they need someone to lash out at and be the bad guy.[1] I think if anything we now know that there are tons of people that can create content (or art) that people enjoy. The ones that were “discovered” back in the day weren’t any more special other than they got picked and someone decided to put them out there. But they think they are and that’s the problem. They don’t realize the luck that played into that success that they had. By the way much of the music these people create isn’t entertaining unless you are high. That’s my conclusion from never being high and listening to it. Not everyone wants to hear drug scene lyrics.

          2. Chimpwithcans

            To completely disregard Beatles and Clapton success as luck and down to the actions of somebody else underestimates their work. There’s also a difference between people creating content that others enjoy, and creating content which lasts the test of time as a valuable product. Reinvestment of revenues into artistic communities is what kept the rock n roll scene churning out good art more than any marketing exec or negotiator. That kind of reinvestment just doesn’t happen with these subscription models or with pirated content today.

      2. JimHirshfield

        Interesting. The business of music… or arts in general, is a rough situation.

    2. LE

      Clapton, in this case, is a blowhard.95 percent rubbish, 5 percent pure – Arbitrary and totally pulled out of his ass. According to whose opinion? The critics? Other artists? I saw a movie that I really liked on Netflix and was surprised to find out it only got a 32% rating on that tomato site.and by the end of this decade I think it’s unlikely that any of the existing record companies will still be in business – Called that one wrong. Eh.With the greatest respect to all involved, that would be no great loss. – Typical ingrate, he did fine under that system. Without that system nobody would know who Eric Clapton was.Music will always find its way to us – Keep thinking that would have been the case back in the day. (Remember Ed Sullivan and the Beatles as only one example..)Music survives everything, and like God, is always present. – I thought he stopped doing drugs.Good rant against the man though.Interesting, just found this attributed (on wikipedia) to a “visibly intoxicated Clapton”.used to be into dope, now I’m into racism. It’s much heavier, man. Fucking wogs, man. Fucking Saudis taking over London. Bastard wogs. Britain is becoming overcrowded and Enoch will stop it and send them all back. The black wogs and coons and Arabs and fucking Jamaicans and fucking [indecipherable] don’t belong here, we don’t want them here. This is England, this is a white country, we don’t want any black wogs and coons living here. We need to make clear to them they are not welcome. England is for white people, man. We are a white country. I don’t want fucking wogs living next to me with their standards. This is Great Britain, a white country, what is happening to us, for fuck’s sake? We need to vote for Enoch Powell, he’s a great man, speaking truth. Vote for Enoch, he’s our man, he’s on our side, he’ll look after us. I want all of you here to vote for Enoch, support him, he’s on our side. Enoch for Prime Minister! Throw the wogs out! Keep Britain white!

      1. Jennie

        LE, you are dead on.There are more record companies now than 10 years ago. It’s a fact.Ironic Clapton is still distributed by Warner Bros.If anything, tech has empowered record companies, especially majors, as they now control streaming and policy.

      2. JimHirshfield

        Opinion, yeah his, clearly, as he wrote those words.Death of record companies? He’s directionally correct, I think. Drunken, heroin, coke induced rant? Yeah, that was him in the 80s. Clean and sober for the last 25 years… and I guess he found religion.

        1. LE

          Death of record companies? He’s directionally correctI give you a 10/10 on the Hirshfield scale for putting a good spin on that one. That’s whitehouse press briefing quality. In movies Milius would have written something like that (watch the documentary on Netflix..)Death and taxes, of course, are always directionally correct. (Not as good as yours but thanks for the idea as always.)

          1. JimHirshfield

            I appreciate your support and respect your perspective.

    3. JamesHRH

      I agree w a lot here.I have the 80/20Squared Rule: 16%Bile, 64%Blah, 16%OK, 4% Exceptional.It’s just true.And no one will miss record execs or agents, etc.

      1. JimHirshfield

        Interesting numbers. Thanks.

  9. ErikSchwartz

    Maybe it’s just my taste in music (mostly opera and 20th century classical) but I have never found that collaborative filtering works well for music discovery.

      1. William Mougayar


      2. JamesHRH

        You run w a cool crowd.

      3. JimHirshfield

        Aria gonna sing their praises as well?

        1. LE

          Not really. Just trying to elevate myself by making an association to something that is considered classy by people! I’ve seen him perform a few times. I’d rather listen to Dire Straits. My delta chi name for him is “joeitall”. Because he typically doesn’t want to hear any advice. It’s really annoying.Hey if you get a website I can pimp you as well. You can register “Jimedian.com” for that purpose. Would look really good as a logo. Imagine that rolling off the tongue of Jimmy Kimmel when you do your first standup.

          1. JimHirshfield


    1. Susan Rubinsky

      I find I am always amused at the selections I am offered based on “what my friends like.” Sometimes I am outright appalled, like I had NO idea friend X was so into heavy metal. Really?

  10. jason wright

    thinking about the idea of electrons on a wire, music is that, and virtual currencies is that. so a blockchain enabled music platform could be the perfect synthesis of music and money, and as sound flows to the listener their money flows to the musician, electron for electron, in real time. a very elegant transaction model, with no central authority, just the distributed ledger keeping track of the flows.The price for listening should be set very low, at an eighth decimal place satoshi per unit of music electron(s) or similar, such that ownership no longer applies as a consumer concept. it’s now the realm of pay as you listen. ‘owning’ is out.

  11. Frank W. Miller

    I love soundcloud. I’m an aspiring bassist and I’ve uploaded a few audio files over the past few years. soundcloud.com/frankwmiller It seems like Internet radio stations or something are farming the site for songs boosting the play counts. Is that the case?

  12. LE

    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.The question is if they miss that “many people” then why is that? Seems like something in the marketing needs to be changed if that is the case. And fyi, “a peer network with a social architecture that emphasizes engagement and sharing” doesn’t really translate very well into a hot button. (I know that is you saying it of course and not sc).Likewise this page is “just ok” it’s to generic in benefits (which it seems are very real):https://advertising.soundcl…Example:From hip-hop to indie, comedy to rock, the SoundCloud audience is loyal and adventurous.Why? After all anyone can say that. Offer proof of that fact.Or:SoundCloud is a unique and influential community of millions of creators & listeners.Why not prove that as well (with a link or something to back it up.)Point being soundcloud is now an established company with real users and real benefits to (in this case) brands. They shouldn’t have to use the type of thing that a newly hatched company does because they are faking it until they make it.

  13. Salt Shaker

    SC has always felt far more “artist friendly” and “a place to hang,” while services like Pandora, Spotify, etc., seemed far more commercialized from the get go. Will that perception change with the launch of a freemium model? Only time will tell. There’s an awful lot of competition for ad dollars in the marketplace, while the real money for sub based music services is on the premium side of the ledger. In its pitch to advertisers–beyond its massive reach, demos, avg. time listening metrics, etc.–SC should try to identify/quantify psychographic points of diff vs. competing services. I believe there’s a fundamental diff w/ SC listeners and how they engage w/ the service, in addition to the platform’s composition of artists.

  14. Richard

    Fred, enjoying the Small Black Mix. Reminding me of a trip I made to Great Britain. Anyting new on Soundclouds Developer APIs?

  15. Larry

    Soundcloud is just not great. It’s glitchy and never operates smoothly.It’s tough to beat Youtube. I wonder how Google’s technology differs from Soundcloud.

  16. Ciaran

    So does this mean that Soundcloud now has licensing agreements in place with all the relevant bodies? And a system for detecting unauthorised uploads of artists’ content?

  17. Bobur

    A very interesting business model. YouTube applied to audio. The sceptic in me says SoundCloud is masking their revenue raising ability by saying “artists will get paid”. But really? How much of the ad money goes to SC and how much to artists? Need more transparency here.

  18. Bruce Warila

    yup, and that’s become the latest spam assault in my world (“great-iphone-cases is now following you on Disqus”.)

  19. JimHirshfield


  20. JimHirshfield

    Thanks for the feedback. Will forward on.

  21. Salt Shaker

    Well, once Countrywide’s Angelo Mozilo “settled” w/ the SEC for $67.5M back in 2010 w/out any criminal charges, you kind of knew where all this was heading. The SEC sadly has no balls.