While Spotify and Apple Music duke it out in the music streaming world, a web-based streaming site continues to grow and grow. Soundcloud now has licensing agreements with Universal Music and Warner Bros., and technology website Techcrunch suggests these partnerships will pave the way for Soundcloud to be worth more than Spotify in the long-run.
Techcrunch argues Soundcoud has a distinct advantage over Spotify due to its business model. Spotify is worth more than Soundcloud right now, but 80 percent of its revenue goes to content license holders for the songs available to stream. Meanwhile, the majority of Soundcloud’s content is user-generated; 100 million more users than Spotify, we might add, and free from licensing fees. Because of this, Techcrunch compares Spotify (75 million users) to Netflix (also 75 million users), while Soundcloud (175 million users) compares to Youtube (1 billion users). Youtube’s revenue comes from original content, and Soundcloud’s focus on up-and-coming artists could build toward Youtube’s success if the website moves toward monetization. Techcrunch makes some great points in their editorial, but claiming Skrillex and Diplo got famous after remixing songs on Soundcloud is absurd considering both artists were making music years before Soundcloud came to prominence.
Head over to Techcrunch to read the full editorial.