Spotify and Soundcloud are the 2 largest online music players in the world. Interestingly, both share the same root, they are from Sweden. Co-incidentially they all started with the letter "S". Anyway, both Spotify and Soundcloud are currently facing their own challenges.
Soundcloud is closed to be bought over by some equity funds to keep them afloat. If that is true, Soundcloud will be very different from where they are now. Actually, Soundcloud now is already very different from when they started. The subscription model is totally not working for them. Quite simply, the market doesn't need another Spotify. So what's next for Soundcloud is anybody's guess.
Spotify is huge, much bigger than Apple Music. As of July 2017, they have 140 millions active users, of which 60 millions are paying subscribers. Based on their 2016 reports, their revenue increased from US$2 billions to US$3 billions. But their losses also increased from US$200 millions to US$600 millions. Pretty scary numbers. Soundcloud losses looked really small compared to these Spotify's figures. [https://www.musicbusinessworldwide.com/spotify-storms-past-60m-subscribers-now-adding-2m-month/]
Recently there were debates about Spotify fake artists, strategically placed in their playlists, to reduce payout to musicians. Many thought that they are trying to control their losses with such an approach. Spotify has so far denied such claims. [https://www.musicbusinessworldwide....uch-in-streaming-comes-back-to-transparency/]
Before the fake artists matter can be addressed, there is another claim about fake streaming, or commonly known as "zoombie fans" in China. But these guys are really smart. In short, they help boost musicians streaming numbers, Spotify pays musicians about 0.4 cents per stream (depending which country the fans are from, ranges from 0.2 cents to 0.7 cents), the "zoombie fans" company gets to split the monies. To put into real world perspective, to make US$2,000, a musician needs to have 500,000 streams. The question in every musician's mind is how long before I can hit 500,000 streams. [https://www.musicbusinessworldwide....artists-its-time-to-talk-about-fake-streams/]
The above are some of the challenges that such music app companies are facing now. They have been around for very long but not profitable. Their shareholders are getting impatient and the founders are forced to react to the constant losses.
Streaming, like optical fibre, are just technologies that serve the musicians and fans, and also the recording companies. I don't see anything wrong with the advancement of technologies. The question definitely lies with what type of business models sits on top of these technologies. I guess freemium model does has its advantages and disadvantages. Looking at Spotify, from the angle of the company and musicians, it seems the disadvantages are outweighing the advantages. If it is not helping the musicians who are responsible for the music contents, it is not going to last.
If you wonder why I wrote this tread, that's because I am involved with building a new app. I hope this can start a discussion where I can collect inputs that matter to musicians. So, please feel free to comment.
Soundcloud is closed to be bought over by some equity funds to keep them afloat. If that is true, Soundcloud will be very different from where they are now. Actually, Soundcloud now is already very different from when they started. The subscription model is totally not working for them. Quite simply, the market doesn't need another Spotify. So what's next for Soundcloud is anybody's guess.
Spotify is huge, much bigger than Apple Music. As of July 2017, they have 140 millions active users, of which 60 millions are paying subscribers. Based on their 2016 reports, their revenue increased from US$2 billions to US$3 billions. But their losses also increased from US$200 millions to US$600 millions. Pretty scary numbers. Soundcloud losses looked really small compared to these Spotify's figures. [https://www.musicbusinessworldwide.com/spotify-storms-past-60m-subscribers-now-adding-2m-month/]
Recently there were debates about Spotify fake artists, strategically placed in their playlists, to reduce payout to musicians. Many thought that they are trying to control their losses with such an approach. Spotify has so far denied such claims. [https://www.musicbusinessworldwide....uch-in-streaming-comes-back-to-transparency/]
Before the fake artists matter can be addressed, there is another claim about fake streaming, or commonly known as "zoombie fans" in China. But these guys are really smart. In short, they help boost musicians streaming numbers, Spotify pays musicians about 0.4 cents per stream (depending which country the fans are from, ranges from 0.2 cents to 0.7 cents), the "zoombie fans" company gets to split the monies. To put into real world perspective, to make US$2,000, a musician needs to have 500,000 streams. The question in every musician's mind is how long before I can hit 500,000 streams. [https://www.musicbusinessworldwide....artists-its-time-to-talk-about-fake-streams/]
The above are some of the challenges that such music app companies are facing now. They have been around for very long but not profitable. Their shareholders are getting impatient and the founders are forced to react to the constant losses.
Streaming, like optical fibre, are just technologies that serve the musicians and fans, and also the recording companies. I don't see anything wrong with the advancement of technologies. The question definitely lies with what type of business models sits on top of these technologies. I guess freemium model does has its advantages and disadvantages. Looking at Spotify, from the angle of the company and musicians, it seems the disadvantages are outweighing the advantages. If it is not helping the musicians who are responsible for the music contents, it is not going to last.
If you wonder why I wrote this tread, that's because I am involved with building a new app. I hope this can start a discussion where I can collect inputs that matter to musicians. So, please feel free to comment.