According to a recent TechCrunch report, SoundCloud has only enough funding to last through the beginning of October. And while the official word from its PR team is that the popular streaming service is fully funded through the end of the fourth quarter, it’s evident that SoundCloud hasn’t been successful at creating a profitable business model. The Berlin-based company recently laid off 40 percent of its staff and closed its London and San Francisco offices, leaving users and staff doubting the platform’s longevity.
SoundCloud’s primary appeal lies in its 150 million-plus user-uploaded songs, DJ mixes, and podcasts otherwise unavailable on mainstream streaming services such as Spotify, Tidal, Pandora, and Apple Music. Whereas artists must pay digital distributors like MondoTunes (formerly TuneCore) and CD Baby to get their music onto these streaming giants, on SoundCloud, musicians upload their work for free. Songs on SoundCloud have the potential to go viral thanks to its repost feature — which works the same way retweets do on Twitter — making it possible for independent artists to attract audiences without record deals, publicists, or placements on popular playlists.
“SoundCloud was this phenomenon that allowed you to get discovered,” says Evangeline Elder, the manager of Richmond singer Rayana Jay. “That’s where a lot of curators were getting their insights from on who’s the next artist to possibly to blow up or who’s emerging.”
Thanks to SoundCloud’s social sharing functions, previously unheard-of artists from niche regional scenes, like Philadelphia’s Lil Uzi Vert and South Florida’s Kodak Black, have risen to mainstream fame. The term “SoundCloud rap” is now used — though, more often than not, in a derogatory or tongue-in-cheek way — to describe the alternative, youthful rap style that flourishes on the platform (a scene that, according to critics, has become derivative of the platform’s most successful songs).
“Now, if SoundCloud can’t recover after all these reports I’m seeing, it’s going to mean a lot for artists who don’t have infrastructure or a management team or publicists,” Elder continues, adding that viral hits on the app, like Xxxtentacion’s “Look At Me,” have made careers almost overnight. She fears that if this free, democratic platform were to lose its relevance because of corporate upheaval, “the freedom of being an independent artist without a plan [would be] taken away.”
SoundCloud has been hugely advantageous for local artists such as Oakland’s Kamaiyah, who quickly ascended to an Interscope deal and a collaboration with Drake off the strength of her self-released single, “How Does It Feel.” According to artists and industry insiders, the Bay Area is notorious for having an insular music scene that mainstream labels tend to overlook. The ability to use SoundCloud to bypass industry gatekeepers has been crucial for the Bay Area’s newest breakout stars. Elder recalls, for instance, how Rayana Jay, the singer she manages, received an outpouring of business opportunities after her song “Magic” accumulated 250,000 plays on SoundCloud in its first two weeks.
Berkeley rapper Rexx Life Raj had a similar experience when the website Hot New Hip-Hop reposted his song “Shit n’ Floss” on its SoundCloud page, catapulting it to over 734,000 streams. “It boosted the record in a crazy way,” he says. “It put it into a million people’s phones.”
Over the past several years, SoundCloud has struggled to monetize its business model, introducing ads and offering two tiers of ad-free subscriptions, SoundCloud Go and SoundCloud Go+. But according to the TechCrunch report that broke the news about the company’s recent layoffs, SoundCloud’s number of listeners is said to have fallen from 175 million to somewhere near 70 million over the past three years.
“Soundcloud made a mistake when it lost track of its strengths,” says Tyrese Johnson, the operations manager of popular Bay Area rap blog Thizzler.com. “I think what they should’ve been doing is finding ways to cultivate the independent artists they already have there and finding ways to get them paid as opposed to trying to go to war with Spotify and Apple Music. It’s not their lane.”
Since the news broke about SoundCloud’s lack of funding, artists have been warning each other to back up their catalogues and upload them to other platforms such as YouTube. But some industry insiders speculate that it’s unlikely that SoundCloud will disappear off the web completely, anticipating a corporate buyout. In either case, the platform’s poor financial standing and declining listenership raises important questions about what will happen when the defining music platform of this decade loses its relevance.
“[Artists] need to take advantage of the changing market,” says Oakland rapper Beejus. “If you’re not putting yourself in a position where you’re able to own your rights where you can upload your music to streaming sites [like Spotify,] which I think will be the next step of this, then you need to reevaluate what you’re doing and kind of step it up.”
Still, other artists question what will happen to the myriad DIY music subcultures on SoundCloud if the platform fails to retain its listeners. Oakland DJ Albert Luera, aka DJ Neto, compares the SoundCloud phenomenon to what happened to MySpace in the late 2000s, when the social network lost most of its users after becoming flooded with ads. As a result, many of the music subcultures that flourished on MySpace — such as the “bloghouse” electronic scene adjacent to Steve Aoki’s Dim Mak Records or the Bay Area’s hyphy movement — faded into obscurity.
Luera described his recent experience of poring over obscure MySpace profiles to find old hyphy songs he remembered from a decade ago. “If the loss of MySpace is any indication about how the loss of SoundCloud is gonna go, it was impossible to find those songs in any sort of quality. It was like googling lyrics and trying to find some message board that was gonna have it,” he says, adding that he fears that much of the music on SoundCloud will similarly be lost.
Sela Oner, a Vallejo producer who once compiled several volumes of forgotten 2000s Chicago footwork music by scouring the remains of MySpace, says that the potential demise of SoundCloud might not be such a bad thing. In his view, some artists have gotten too stuck in the “SoundCloud rap” formula. “It’s affected music a lot, that’s why things sounds the same. So if SoundCloud dies, I think we kind of need that refresh.”
“Music is always changing, the way we consume media is always changing,” says Thizzler’s Tyrese Johnson. “If SoundCloud were to die today, it would suck, but it wouldn’t be the end.”