Without Majors, SoundCloud Had The Potential To Be A Better, Independent Music Space

How SoundCloud’s strategies failed to account for shifting paradigms and new opportunities

Rising Red Ink

Let’s run the numbers quickly. As I noted in my previous piece, Soundcloud’s revenue has grown for years. In 2010, the company recorded $1.8 million in top line; in 2012, $9.6 million; and, in 2014, $19.6 million.

Major (Label) Gamble

Its cuts in staff are indicative of a larger problem. Namely, SoundCloud’s royalty payments are expensive. If Soundcloud’s payout to the major labels is similar to Spotify, it could reach the 80 percent mark of its subscription-sourced top line; in related topics, SoundCloud has consistently declined to comment on how much the major labels own of the company.

  1. Major label deals changed SoundCloud’s value proposition. Due to its major label deal, Soundcloud could sell the same major label content as Spotify and Apple. SoundCloud would no longer be the home only for independent audio, putting a pin in what arguably made the streaming service unique.
  2. The major label deals now required SoundCloud to pay the same piper as Spotify, Apple, and others.

What Ifs And Takeaways

All this underscores SoundCloud’s decision to start down the major label path.

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Adam Marx

Master Relationship Builder @Zero2OneNetwork 🚀 | @ATLTechVillage Advisor 😎 | Speaker 🎙️ | Prev. CEO @glipple + published @crunchbase, @mattermark + more ✍️