SoundCloud has said it believes there is plenty of room in the competitive world of music streaming for different platforms as the company launches its paid for subscription service, SoundCloud Go, in the UK and Ireland just weeks after its US debut.
Co-founder and technology chief Eric Wahlforss shook off suggestions that it faced stiff competition from the likes of Spotify and Apple Music, telling City A.M. "This is not a winner takes it all market, like with Google or Facebook".
"If we look at the space, there are few players in it, and I think the key really is differentiation. I think it's great for streaming overall," he said.
Millions of tracks
SoundCloud has agreed deals with the major record labels to stream tracks from the most popular artists, putting it in more direct competition with rival services which also include Pandora in the US and Deezer in Europe.
However, they will be available alongside the work of independent artists, up and coming musicians and DJs which SoundCloud is known for, and SoundCloud Go will boast 125m pieces of content from both major and independent artists.
“I think it's in the music industry's interest that there are a number of platforms out there. But we feel like we have a very justified place. We provide things that other platforms don't that are very important and so we think we're a pretty critical component in that and that gives us a lot of leverage,” said Wahlforss.
“We are the platform with the most exclusive content, of any platform, which is a side effect of us being a social media platform. That means Kanye West has a lot of content that isn't available on Tidal, for example”
It’s this point of differentiation which SoundCloud believes can help it rise above the noise.
It will move to a subscription model costing £9.99 per month alongside free version supported by advertising, and will offer a 30 day free trial to tempt potential subscribers as well as a feature to save tracks to listen to offline.
The deals with the likes of Sony, Warner and Universal signals a significant step for the music industry which has often seen such platforms as rivals rather than collaborators and has had issues over rights with remixes. It has been what Wahlforss describes as a “multi-year project” to get them on board.
Advertising on the service in the UK is new but has been on the US version for a year and a half, and has attracted big brands such as Jaguar and Pepsi. In the UK it has a partnership with Global Radio to use its digital advertising exchange to serve audio ads and there are other ad formats on the platform.
US and UK success
It is still too early to measure the success of SoundCloud Go in terms of exact sign up figures in the US due to the trial period, said Wahlforss, but it’s looking good.
In terms of success in the UK, its second market for SoundCloud Go, the Berlin-founded firm is measuring the “usual things”, growth in ad revenue, subscription revenue and user growth and the move is already paying off.
“What we're seeing now in the US weeks after rolling this out is an up take on all three. That's pretty significant. We're growing faster than ever in the US now as a result and we are still figuring things out, it's early days… but because of that we think it could have the same impact in pretty much every market we roll it out to, which is a pretty amazing place to be,” said Wahlforss.
The main source of revenue for SoundCloud previously has been paid-for creators accounts for artists, and while it boasts 175m monthly listeners, it remains loss making according to its latest accounts for 2014. The push for revenue comes after having secured a new round of debt financing which takes its total investment from several top venture capital firms to more than £100m.
"I'm not worried about our finances" said Wahlforss, who said he couldn’t comment on them more specifically.
“All of the numbers in that report are very old. It doesn't really give a very accurate picture of the company's financials today. So we're not worried and we're very focused on execution.
"The platforms which are differentiated are going to have a justified place in the world and we're going to be one of the key ingredients for growth in streaming,” he continued.
“It's very early days for streaming and it's an expanding universe. If you look at other platforms it's very fragmented, a lot of platforms are not growing that fast, we are growing very fast. And in terms of revenue, we're probably going to be the fastest growing addition to that."
It plans to roll out SoundCloud Go to "several" other countries by the end of the year and is moving "very fast".
“If you think about what it means, it's purely additive. We have many millions of users who use it for many hours a month and they're the kind of people who are dying to pay for a subscription because it gives them everything that they need,” said Wahlforss.