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.”