Apparently SoundCloud is. "We don't go into the specifics of how it works, but we say it's a framework for the entire industry," co-founder Alexander Ljung tells Billboard. "When you're doing something at true internet scale -- millions and billions -- what we've created works for most stuff." It's a watershed moment for digital music in many ways. Before its recent deal, Sony Music was more than happy to pull their music down from the service than possibly inflating the value of a company that it saw as infringing its copyrights. (SoundCloud has never turned a profit.) Now, at a scale that's meaningful, this once "illicit" vessel can make money, and the people making it can, at least, now be left to their work.
(When asked whether a producer who, for example, uses 40 percent of one song and 40 percent of another and contributes 20 percent of their own original material to the work, will get paid, a spokesperson for the company said that the goal is "for every creator to get paid on SoundCloud." Recent suits dealing with the complex publishing industry illustrate the complexity of SoundCloud's solution.)
Playing to win in the digital music space isn't easy -- just ask anyone involved, whether the CEO of a major label, the CEO (maybe even better, its CCO) of a major streaming service, the CEO of a major publishing company, an auxiliary percussionist with several medium-to-very popular songs under their belt. SoundCloud has spent the better part of a decade navigating that sonic swamp of stakeholders and snakes, attempting to balance the demands of a consumer base equal parts tech-savvy and legally agnostic with an increasingly frustrated system of gatekeepers -- namely, the major labels and publishers.
"It was important to us to preserve the creative elements that make SoundCloud so popular with artists and fans," Warner Musc Group CEO Stephen Cooper, whose company was the first to sign up with SoundCloud's advertising program, says in a statement on the news, "while evolving the business model to better recognize the value of music, and provide a range of new commercial opportunities."
With licensing deals now in place between SoundCloud and most major recording stakeholders, Ljung now wants SoundCloud to "finally" start making serious money for itself and its partners, with the aim of being one of "the biggest revenue generators in the industry."
That means turning its 170-million-plus monthly users into paying customers. Part of that might be playing along with a game that segment leader Spotify has pretty much refused to -- the practice of windowing.
"Now we have two portions," says Ljung, "ads and subscriptions. So the creator has the choice what to put where. Like we've always done, we want to give artists control. You could imagine a case where superstar x has a brand new album, one track in free and have that run across the entire internet, generating ad revenue and promotion... and put the rest of the album behind the paywall."
Ljung is describing exactly what majors have privately expressed as their ideal streaming situation. What could result is a public power shift away from services that don't play along in favor of those that do. If Universal Music has a major release that they would like to stream, sort of, now they can. "The person who has the rights should be able to say what happens to the work," Ljung says. And they will... but not immediately.
Remember: Windowing is a two-way street. Asked if Adele's 25 is on the new service, Ljung demurs: "Ask her." The long-term strategy would seem to be that majors will prefer, as Apple Music and Tidal's recent exclusives seem to indicate, to put their music on services where they have more control. Those services will have the music that people want to hear. They'll sign up, and the flood of memberships to Tidal in the wake of Pablo, however-fleeting, point to this being the case (in certain cases).
SoundCloud's updated app is as clean and prim as the existing one, with some problematic missing pieces at launch. The company focused on its "core objects," meaning specific songs, playlists and users. That means, unfortunately for those used to most digital music players, a lack of plain-as-day separation between albums, artists and songs. On the platform a user isn't an artist, a song isn't that song, and a search for several artists turned up a confusing mix of tracks, both user-generated and official, and no discrete sets outside of the playlists those artists had created. The experience is as simple and elegant as ever before -- but as Spotify has learned, a massive catalog needs massively scaled curation to go along with it.
Its solution to that is simplistic for now -- find a song you like and you can make it into a radio station, much as SoundCloud already does. The difference is, the company claims, in its algorithmic curation, which it says has been greatly improved.
Offline listening is made easy and will be very useful to those who have started favoriting and saving music on the platform. All liked music is synced to the phone, with the option of choosing how much hard drive space you'd like to commit.
And why is the Berlin-borne company releasing its biggest product since launch in the U.S. only? "You can't do everything on day one," replies Ljung. "We'll start here." For a tenacious entrepreneur, one who is visibly aware of the tenuous balance he's struck, it's doubtful to end in that same place.