Analysis

SoundCloud boss: ‘Freemium vs. premium debate is not helpful’


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Arguing about whether streaming platforms should have ad-supported or subscription only tiers is a pointless discussion, according to SoundCloud founder Alexander Ljung.

Instead of arguing over which route is best, the industry should instead be focusing efforts on monetising the “three billion” people on the internet through a combination of the two.

Ljung said that’s what SoundCloud is doing through its On SoundCloud programme during a keynote interview today at Midem. Launched last year with 20 partners, it now has over 100 on board, including over 20,000 independents via a recently-signed deal with Merlin.

“I think that there is a lot of debate right now on ad-supported versus subscription, but I think we are all doing ourselves a disfavour if we’re framing this discussion as [one against the other].

“For me, it’s very clear that it’s a combination of both, and that’s for a few reasons. Firstly, music has an incredible power to connect every person on the planet and part of it is about how you share that experience.

“There needs to be openness around the share ability. There are 3bn people online, you’re never going to all get those into subscription, it’s not going happen.”

Offering a subscription-only tier will mean platforms risk missing out on “a lot of users” while an ad-only model will leave “a lot of money on the table”, Ljung claimed.

“Instead of having a debate over ad-supported or subscription, the big question of the music industry is how do you segment the market into the right place. You get the people that are willing to pay for a sub into a sub and the others into an advertising model. It’s really about how do you draw the line between the two.”

Ljung has big ambitions to get those 3bn people who are online using SoundCloud and “monetising all those people in the best possible way for creators”.

“Some of them will be through ads, some through subscription. Thats why I’m chosing both because music is for everyone and I want to create as much revenue as possible for creators,” he said.

Back in 2009, SoundCloud won the MidemLab startup competition, and now has over 175 million unique users monthly, with 12 hours of audio uploaded every minute, and a catalogue of over 100 million tracks.

Focusing on mobile is the priority for the future, “everything else is extra, mobile is the thing that matters,” said Ljung.

When asked what he thought of Apple’s soon to be launched streaming service, Ljung was hopeful its arrival will be good for everyone in the digital music market for raising awareness and the potential of more streaming-friendly hardware in future.

“Apple have a lot of cash, they are very good at marketing, and they build very good hardware. If they get into music streaming, they are going to be putting a lot of marketing around it,” he said.

“All of us in this industry get a bit ahead of ourselves. We are still in the very early stages of streaming, the amount of overall listening that happens on streaming is still a very small part of that. Apple will increase the market overall.

“They also make a lot of hardware, if they are interesting in streaming they are going to start developing a lot of platforms and hardware that can better [support that]. We run on a lot of Apple hardware, so how that impacts the music streaming experience, the better.

“We are a platform with 175m unique listens every month, and over 100m tracks, as far as I know, nothing [else] gets close to that. With that scale and our very different position, if Apple come in and increase awareness for music streaming in general, I’m all for it.”

Rhian Jones

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One response
  • Rob Muir says:

    I would sooner pay for it, than have ads messing up my songs, or causing them to skip anymore than they already do.

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