Spotify’s most recent financial results may come as a shock to those outside of the streaming industry, but to insiders they’re simply another example of what a struggle it can be to make streaming music profitable.
Even YouTube, arguably the biggest streaming service in the world, has failed to make a single dime for tech giant Google since it was purchased back in 2006. Despite accounting for about six percent of Google’s overall sales last year, it didn’t contribute to earnings.
Everywhere you look, it seems there’s a battle over the monetisation of streaming. As Tone Deaf detailed back in March, the days of free streaming are slowly coming to an end as labels seek to put the kibosh on “freemium”.
The latest company to become entangled in the skirmish is beloved audio distribution platform SoundCloud, who’ve experienced two major blows in just as many weeks. First, Sony began pulling music from the platform.
As The Verge reports, Sony Music has been pulling songs from the SoundCloud pages of some of its biggest musicians, including the likes of Adele, Kelly Clarkson, and Miguel, after they failed to reach an agreement with SoundCloud on streaming royalties.
According to Billboard, the breakdown in negotiations stemmed from Sony’s view that the Swedish audio company have not provided enough options for the music giant to make money off of the music that it hosts there.
Reportedly, over half a dozen Sony musicians have already had music pulled, and it seems more could follow. However, it’s unclear if this is simply negotiation tactic or the conclusion of the negotiations.
“We are in ongoing conversations with major and independent labels and will continue to add partners to the [On SoundCloud] program,” said SoundCloud in a statement. On SoundCloud introduced ads to the site’s music streams, including audio spots and small pre-roll popups.
However, as The Verge notes, the ads on SoundCloud only play every so often, which may be limiting how much revenue SoundCloud brings in and is thus able to share with labels. Naturally, without major labels on board, SoundCloud is limited in the amount of popular content it has available.
[include_post id=”440759″]
If that wasn’t enough, it looks as though Mixcloud, SoundCloud’s less prominent competitor is out for blood. As Stoney Roads reports, with many SoundCloud users looking to jump ship amid consistent frustrations with copyright on SoundCloud, Mixcloud have just made the transition a whole lot easier.
The company has just announced a Beta feature that will allow SoundCloud users to export their mixes directly across the two platforms. While the play count will not be carried across, meaning users will have to start accruing plays from scratch, they won’t have to completely overhaul their distribution.
Whether or not this is the beginning of the end for much-loved music sharing platform remains to be seen, but at the moment things don’t look good. With a competitor going for the jugular and a major label pulling star artists from the site, SoundCloud is in a beleaguered state.
The challenge for the company is now twofold: managing copyright restrictions to keep users happy and prevent them from jumping ship, while appeasing the major labels whose popular content will drive traffic to SoundCloud, but which comes with an obvious price.
