SoundCloud's new CEO says update won't change what makes it great
Chance the Rapper traveled across the country over the last year telling crowds, "no problem."
And yet, for SoundCloud, the music service that helped propel him to fame, it's been a year of turmoil. In July, the company was forced to lay off 173 employees, about 40 percent of its workforce, as it failed to pull in enough money to meet its costs.
The move upset the SoundCloud community, including Chance:
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A month later, SoundCloud announced a new round of fundraising, the largest in the company's history, and two new hires. Kerry Trainor and Mike Weissman, both of whom worked at video-sharing platform Vimeo, joined as CEO and COO. SoundCloud was saved, at least for now.
"We are definitely not going bankrupt any time soon," Trainor said in an interview this week.
SoundCloud isn't alone in its struggle to empower creators while securing a sustainable business model for itself and its artists. Sites like Patreon, Medium, and Reddit have also had to fundamentally change their policies due to financial pressures.
So what is SoundCloud doing to survive after years of confusion? It starts with a new app. Mashable received a sneak peek of the new design. We also sat down with Trainor to discuss the current state of SoundCloud and what he has planned for the future.
Yes, SoundCloud, the app, has a new look. But according to Trainor, SoundCloud hasn't really changed.
"I didn't join SoundCloud to turn SoundCloud into something different than what it set out to do."
"I didn’t join SoundCloud to turn SoundCloud into something different than what it set out to do. It’s about making sure that SoundCloud can be successful doing what it set out to do, being creator first and being the largest open audio platform," Trainor said.
And yet, the changes in SoundCloud's app are quite similar to what Spotify, a major competitor in the music streaming industry, has to offer listeners.
New SoundCloud offers featured playlists, including Hip Hop Supreme for rap tracks and In the Mix for DJ mixes. Spotify invested in growing its own curated playlists, including the very popular RapCaviar. SoundCloud's new app also will surface more playlists based on each user's listening behavior. Earlier this year, SoundCloud released The Upload, a playlist based on what you like, similar to Spotify's Discover Weekly.
Although the app may include more Spotify-like features, the hope for SoundCloud is that it makes the experience easier and more enjoyable for new and old users.
"New Home is a big step forward in terms of making it easier than ever for listeners to discover the great creators on SoundCloud. Let’s make it a more intuitive, simple, lightweight way to get into the incredible depth and diversity that the SoundCloud community represents," Trainor said.
Spotify and SoundCloud may function more similarly, but their music offerings are different. SoundCloud has been and continues to be a place where independent artists can easily upload their content, whether it's a podcast, a DJ mix, or an original song. That makes SoundCloud's library much more expansive than other streaming services.
Independent artists can choose whether to give SoundCloud exclusives. Chance the Rapper's Acid Rap is available on SoundCloud and not on Spotify, for example.
Music streaming service Tidal has bet its business model, in part, on exclusives. That's not completely the case for SoundCloud, Trainor said. But it is one of the benefits they receive for being open to any creator.
"Our goal is to not go head to head with the mass streaming services. Our goal is to serve creators first and foremost," Trainor said. "The reason we have de-facto exclusivity on 100 million tracks is because it’s coming straight from the creators."
But while SoundCloud is one of first places artists like Kehlani, Lil Uzi Vert, Lil Pump, and Post Malone share their music, it doesn't mean the company is profitable.
SoundCloud hopes it can generate more revenue from these artists. The company has three streams of revenue, which it hopes to grow: creator services, paid subscription for listeners, and advertising. Trainor said his company has hired more engineers and marketers to build more creator-focused tools.
Pitching SoundCloud as a service fundamentally different than other music streaming apps like Apple Music and Spotify is still a big part of Trainor's agenda. That pitch is directed to artists, to listeners, and to advertisers.
"It’s leaning into what makes SoundCloud special, in terms of not being one-way pipe delivering the same catalogue," he said, giving credit to the "incredible creators" who use the service.
"Look, it’s their talent. We’re just providing them the ecosystem."
Chance hasn't pulled away, at least.
Topics Music
Kerry Flynn is a business reporter for Mashable covering the tech industry. She previously reported on social media companies, mobile apps and startups for International Business Times. She has also written for The Huffington Post, Forbes and Money magazine. Kerry studied environmental science and economics at Harvard College, where she led The Harvard Crimson's metro news and design teams and played mellophone in the Band. When not listening to startup pitches, she runs half-marathons, plays with puppies and pretends to like craft beer.
