This week, news of SoundCloud’s financial troubles came to light. Reports of 40% layoffs and an 80 day doomsday countdown have left artists and listeners wondering, “What went wrong?” and “Where will our music go?”
Audiomack (one of SoundCloud’s longtime competitors) took to Twitter on July 13 and shed some light on what they believe to be the missteps SoundCloud made during and after an unofficial partnership between the two companies. As it turns out, “Audiomack was actually behind many of the large play counts on SoundCloud." Their goal was to centralize plays on SoundCloud, garner artist exposure, and have everyone walk away from the table a winner. But, Audiomack alludes to the fact that not everyone at the table shared that vision.
We reached out to Audiomack CMO and co-founder, David Ponte, and asked him about Audiomack's relationship with SoundCloud and his thoughts on the platforms’ futures. SoundCloud says they're not going anywhere, but the financial troubles are concerning, and Ponte believes his company can help fill a void if SoundCloud is ever forced to shut down.
You guys tweeted that SoundCloud "lost sight of what's really important, the artist." What do you mean by that?
They turned their backs on their core audience in order to attract new listeners and placate the other stakeholders in their business (investors mostly). There are countless examples of this including but not limited to:
1) Running ads on artists pages who pay $14.99 for the platform, and not sharing revenue to some artists. SoundCloud will point you to their On SoundCloud rev share program, which does pay some artists, and deny this, but we know firsthand of numerous artists with substantial play counts who have never received a response from SoundCloud about receiving a share of revenue off ads they see on their tracks.
2) Implementing a Content ID system which mistakenly flags authorized tracks from superstar artists, including Martin Garrix, Kaskade, and many more. This often messes up major releases artists have planned with their PR.
3) Not developing features their core audience (artists) have been requesting for years, instead focusing on premium consumer facing features.
Could you guys imagine a buy-out of their platform? How do you think this will end?
It’s far-fetched to think that SoundCloud will have a Vine-like ending where it just disappears, but the signs point to a buy out from another company. Many times, laying off staff indicates to a potential buyer that they are serious about creating a path to profitability but I’m just speculating. They still have a large audience so that’s still valuable. You could also make the argument that a company who might be interested in buying SoundCloud will wait until they have maximum leverage—meaning when the “50 days” are up and they have no choice but to sell the company.
This is an opportunity for Audiomack to showcase our platform, which contains many of the functionality that Soundcloud has (for free) in addition to offering different ways for users to discover new artists they will love.
If SoundCloud isn't able to recover financially, how do you think their absence will impact the music world?
There will continue to be shifts in the music ecosystem, just as there has been with streaming becoming the primary method for people to discover and listen to music. A few things that come to mind is that many A&Rs and labels use SoundCloud (and Audiomack) to not only discover talent but to incubate talent as well. It’s a testing ground to seed new sounds and see what grows into a potential earner. They will have to adjust their strategy on how to discover and groom new talent.
Many independent artists will have to find new ways to share their music. Obviously, Audiomack is a great way to share and discover music, but I’m sure there must be other sites and apps out there that have similar capabilities to ours.
Do you see all of this as an opportunity for Audiomack?
Ultimately, yes. This is an opportunity for Audiomack to showcase our platform, which contains much of the functionality that SoundCloud has (for free) in addition to offering different ways for users to discover new artists they will love.
What was the initial nature of your partnership with SoundCloud and at what point did the relationship become rocky?
There was no official partnership, we were just given an API key which allowed artists to upload tracks to Audiomack which streamed through the SoundCloud API, just as sites like Pitchfork and Hype Machine do. There was no sign of anything being rocky prior to them informing us that in 30 days the API would be shut off for us.
In May, SoundCloud told us they would be terminating our API key. We offered to pay them for continued access, and they declined (without even asking how much we’d pay).
As you mentioned on Twitter, you guys were responsible for some of those huge plays we saw on certain tracks. Can you elaborate on that statement?
Until May of 2017, Audiomack enabled artists to add songs to their Audiomack profiles via the SoundCloud API, which many of our major artists did. This allowed those artists to market themselves beyond SoundCloud while still consolidating their play totals on SoundCloud (a play on Audiomack also counted as a play on SoundCloud, if a song was streaming through their API). To be frank, this was not an ideal situation for us, as it meant any music uploaded via their API was out of our control—if their servers went down, the music was gone, and we couldn’t allow users to stream it offline in compliance with their API Terms of Service. This was something we did because we constantly had artists—some small, some who are touring the world—ask us for this capability.
We had a number of artists who saw a substantial amount—often times 50% or more—of their total plays on a SoundCloud track coming from Audiomack. Once word got out amongst artists and labels that we could help drive more engagement on SoundCloud tracks, we had more and more people coming to Audiomack and using it to broaden their reach.
Can you break down the deal you offered SoundCloud, which they denied?
In May, SoundCloud told us they would be terminating our API key. We offered to pay them for continued access, and they declined (without even asking how much we’d pay). We reminded them that thousands of artists who are paying them $15 or more per month for a premium account were doing this themselves and wanted their music streaming through the API to help their marketing—this did not change anything.
How much of their current situation do you feel would have been avoided had they continued to work with you guys?
I don’t think them cutting off Audiomack itself has much to do with their current predicament, but the thinking behind it—let’s cut this off even though it matters to artists paying us $15 a month—is the source of every problem they have right now. They have alienated their most important users.