This past weekend, Pando Daily came out with a very informative, well-written article discussing the recent downfall of popular music service Soundcloud and an analysis of exactly where they went wrong. If you’ve kept up with the headlines for last couple of months, you’ll know that Soundcloud has recently beefed up its efforts to crack down on its loyal users’ copyright infringements and use of remix/bootleg material that doesn’t belong to them. Using ZEFR, Youtube’s first line of defense against copyright, Soundcloud has already begun to alienate the smalltime artists that made them the service they are today. By removing tracks that contain “stolen” content and putting the power in the hands of the original creators to run ads over them, the site revealed the motive to abandon their founding principles.
Despite this approach, Soundcloud still had a chance to survive as a company by pandering to the bigger labels. Because their operating losses doubled between 2012 and 2013, the service decided to “legitimatize their business” and reach out to organizations like Sony. With a roster like theirs at Soundcloud’s disposal, they would surely gain back some of the following that ditched them for sites like Bandcamp. This idea has backfired, however, as it has now been made clear by Sony that the service simply does not offer as competitive a monetization as other organizations like Pandora or Spotify.
Now, it seems as though Soundcloud is trapped in limbo. The smaller, independent artists are no longer allowed free reign to create and share music the way they want to, and the bigger labels, who were Soundcloud’s last shot at stability, are now turning their backs on them because they haven’t monetized themselves enough! Soundcloud needed these labels to stick by them, but because they were slow to the game of selling out to major companies it appears that it is now too late for them to start.
This week was the kicker, as Sony finally began removing the EDM artists from Soundcloud’s clutches. Madeon even took to Twitter to voice his opinion on the matter.
Thank you SoundCloud for being such a great discovery platform over the past five years. Well done Sony for holding your own artists hostage
— Madeon (@madeon) May 19, 2015
(Lots of love for my label Columbia of course, they’re great. Less love for Sony Corporate’s disconnected-from-reality strategy.)
— Madeon (@madeon) May 19, 2015
Soundcloud is now standing on a precipice. It seems too late to turn back, remove ties with ZEFR, and return to the old ways of unrestricted uploads. It also appears to be impossible to satisfy the major labels, as better and more lucrative opportunities have been presented to them via Spotify and the like. This mistake, while certainly detrimental to the service, feels somewhat distanced and irrelevant to its longtime users. We have no say in this matter, and have already been struck down by their choices to change the rules on the site. The addition of artists’ work from major labels was a happy convenience for us, but was in no way our reason for sticking around. It seems the consumers are taking a backseat in the debate over what Soundcloud should do next to save itself. If monetization and increased revenue for Soundcloud’s owners and operators is now of primary importance, all we can do is sit back and watch the slow motion train-wreck run its course.
Visit Pando Daily’s article to learn more.