What would the death of Soundcloud mean for labels?

Soundcloud quickly rose to prominence as the go-to social platform for music lovers and makers alike, however, its future is in huge doubt following the reports that the company only has 50 days before its funds dry up.

My aim is not to clear up any rumours, nor get into the politics and business of the scenario. Instead, this piece seeks to address what Soundcloud's future - or lack thereof - would mean for independent labels.

Serving fans the goods

The death of Soundcloud primarily would give us less exposure to our audience. New fans would be far less likely to discover our material; old fans would find it harder to keep up with our new material. With one less platform, we may be reduced to using YouTube as our main platform for unleashing our music, which whilst not being the end of the world it does mean some unwanted considerations.

Serving DJs and journos the goods

Soundcloud is equally adept for use as a promo tool. The ability to upload private tracks allows us to send material to tastemakers and journalists ahead of the release schedule as part of the campaign process. At Terabyte we've made use of the connected Dropbox preview functionality in recent years, so it's less of an issue, but other labels may have to change their approach to compensate.


The other side of this coin is about the artists and producers. We request as standard that all prospective artists and producers send us demos as private Soundcloud links. That way, we do not have download folders full of demos that become unwieldy to keep on top of - the artists we already work with will attest to me being disorganised at the best of times! The easy nature of these features in Soundcloud will be deeply missed in A&R departments globally. So too will they be hindered by the fact that if Soundcloud were to die, a giant repository of unsigned music will die too.

Loss of revenue

Perhaps surprisingly, Soundcloud does serve as a revenue stream for labels. Like Spotify, Deezer, and even YouTube, labels receive royalty payments from Soundcloud, albeit on a smaller scale. In an age where streaming accounts for more and more revenue for labels, having one less platform in the bag will mean less revenue, and therefore less investment from labels.

For what it's worth, I think Soundcloud will be saved from the brink. Whilst they clearly need to get their financial shit together, the platform is a unique service offering to all parts of the musical consumer journey. If someone can salvage SoundCloud, music will be better off.

Follow co-founder Auzi on Facebook here.


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