SoundCloud
SoundCloud, music streaming service where users upload and promote their own music and audio content. SoundCloud is a privately traded company with 175 million users as of 2023. Its headquarters are in Berlin.
The SoundCloud website was launched in 2008 by Swedish sound designer Alexander Ljung and Swedish electronic music artist Eric Wahlforss. The platform was praised as an innovative way for artists to share and promote their music, as it enabled artists without a record label or distributor to release music directly to their fans. Billie Eilish released her debut song, “Ocean Eyes,” on SoundCloud in 2015 at just age 13—the song went viral overnight.
SoundCloud was especially popular with hip-hop artists and fans, leading to the rise of a genre dubbed SoundCloud rap. SoundCloud rappers developed their own sound and subculture. Songs often featured lyrics that were repetitive, unclear, or technically distorted (giving rise to the label “mumble rap”), and many emcees sported striking facial tattoos and brightly dyed hair. SoundCloud rap was the hip-hop of Generation Z, and its attitude, fashion, and do-it-yourself ethic led some to recall the punk revolution in rock. SoundCloud rappers Lil Uzi Vert and Post Malone went on to massive mainstream success; Post Malone’s track “Sunflower” (recorded with Swae Lee for the animated film Spider-Man: Into the Spider-Verse [2018]) was one of the top-selling singles of all time. Tragically, some of the biggest names in SoundCloud rap died as their careers were just beginning. XXXTentacion was only 20 years old when he was murdered in 2018, and Juice WRLD died of an accidental drug overdose days after his 21st birthday in 2019.
On SoundCloud, artists and fans interact more directly than in traditional music distribution models. Its comments sections and track shareability give it the functionality of a social media platform. SoundCloud offers premium services for artists, allowing them to better promote and monetize their music. In 2021 SoundCloud changed its royalty distribution model. Under the new model, royalties are awarded on the basis of subscription and advertising revenue, as opposed to the number of streams.
The company’s outsized reputation in the music world was not reflected in its market share. While SoundCloud attracted independent artists, it was not as successful with those on major record labels. In January 2014 SoundCloud announced plans to seek licensing deals with major record labels in order to host licensed music. A potential partnership with the social media platform Twitter (now X), announced in March 2014, was undone by SoundCloud’s lack of arrangements with music labels and its limited ability to host licensed music. In early 2016 SoundCloud reached licensing deals with Universal Music Group (UMG) and Sony Music Entertainment, which limited certain material to paid subscribers. The deal with UMG, a company that had once declared SoundCloud a “pirate site,” gave UMG the right to directly take down any files on SoundCloud that violated its copyright. In 2015 SoundCloud partnered with Zefr, a content rights management platform, to track copyright infringement across the platform. These changes drew criticism from both artists and fans, who worried about the influence of large media conglomerates. Some complained that SoundCloud was abandoning its initial user base of independent artists and their fans in favor of attracting a mainstream audience and venture capital funding.
In May 2015 Twitter was considering acquiring SoundCloud for approximately $2 billion. However, the deal did not go through. Likewise, Spotify’s plans to acquire the company, announced in September 2016, fell through. In December 2021 SoundCloud’s chief financial officer Drew Wilson claimed that the company was “at the doorsteps of break-even” and that he expected the company to generate a net profit by 2023. As of 2023 the company was valued at $800 million.