Why SoundCloud Will Beat Other Streaming Music Services – Review

“Soundcloud has focused on making a platform creators want to use. They will continue to improve their consumer experience, as mainstream adoption continues. This will only entice more and more creators to join.” – Dan Polaske Hypebot.com

  As we all have seen in recent music industry news streaming services have been a major topic discussed by music executives, entrepreneurs, experts, and more.  Entrepreneur and blogger Dan Polaske seems to think that the streaming service that will come out on top of this streaming war will be Soundcloud not Spotify, Deezer, or the newly released Beats.   Polaske states that the leading streaming service at the moment is Youtube, noting that it technically isn’t a streaming service Polaske notes that regardless its makes up most music streaming online largely due to its user generated content.   Polaske seems to think that this focus on user generated content is what is going to make Soundcloud stand out among its other competitors.

  In addition to user generated content Polaske sites 3 major differences that will further lead soundcloud to success;

Cheaper

“To get your music on most streaming services you must go through an artist aggregator. There are paid and (apparently) free options here are Spotify’s recommendations. You can upload up to 2 hours of audio for free directly to Soundcloud.”  Dan Polaske Hypebot.com

Directness & Instantaneous 

“According to TuneCore it takes 2-3 business days to get your music on Spotify. In a world of up to the second content, that doesn’t quite cut it. On Soundcloud your music is uploaded directly and is live almost instantaneously.”  Dan Polaske Hypebot.com

Copyright Friendly  

“In order for your music to go live on most streaming services it must be cleared for copyrights. In other words my (unofficial) remix of Beyonce’s “Drunk in Love” will not make it to Spotify. However, on Soundcloud it is totally acceptable.”  Dan Polaske Hypebot.com

Conclusion

Polaske thinks that these factor in addition to the ability of users to upload unfiltered content will only make the platform more appealing to users and people who want to stream and discover new music. The major factor I think is overlooked is the way the brand is thought of in the eyes of consumers and potential users.  Right now when you mention streaming services the first names that come to your head are Spotify, Deezer, and Beats. In order for soundcloud to really even be considered as part of the streaming world it needs to establish a brand  positioning as a streaming service rather than an online distribution platform. To Polaske’s point about user generated content, price, directness, and copyright flexibility I completely agree t that hose are all factors that a benefiting Soundcloud at the moment but as a consumer if someone asked me to recommend a streaming service Soundcloud wouldn’t even be in my top 3 answers.

Articles Cited

http://www.hypebot.com/hypebot/2014/02/why-soundcloud-will-beat-other-streaming-music-services.html

MY SPACE AGAIN??

My Space’s decline was mainly due to a series of factors that didn’t make this tool as easy and comfortable as its main competitors Facebook and Soundcloud who has now become  one of the most popular music uploaders. Well, the chief executive is thinking about a new plan for giving a new light to the first significant social network of our generation. It’s hard to give more details about the strategy but the team anticipates its user value, who will be provided by a new experience and not just a duplication of the previous model. While his main competitors stand for streaming services as Spotify and Deezer, one competitive advantage will be the analytic system who is inglobed in it and allows to know “who’s listening to”. It’s not uncommon that an A&R, as in the past, could find this tool more suitable for music research and selection, and once again this could be another positive feature. Another component that provides a competitive advantage, will be the design content and in particular the component of “fun” who is represented in it. The new product is named Specific Media and and the main focus will be on music. In addition it can analyse, through its new technology, who are the most engaged artist’s fans.

However, there is still uncertainty regarding the future profitability of the platform but a new step towards an improvement of the relation between audience and artist seems to be the key factor.

Look out Spotify, Deezer isn’t far behind

Paris-based digital music service Deezer recently announced $130 Million in its fourth funding round from Warner Music Group’s owner Access Industries, a multi-faceted holdings group in the natural resource and chemicals, real estate and media and telecommunications industries.  Deezer appears to be gearing up to compete with Spotify on a global scale, however opting for a slightly different strategy – The company is currently targeting 200 countries world wide, many with few existing digital music markets, but staying away from the biggest piece of the pie (and also the biggest legal headache), the United States, at least for the time being.  Deezer CEO Axel Dauchez stated in December of 2011 that “due to market saturation and low growth forecasts” along with the fact that the two represent only 25% of global music consumption, the company has decided to bypass them (U.S. & Japan)”, at least, for now.    Nevertheless, within just five years, the five year old company has obtained 2 million subscribers and 7 million active monthly users compared to Spotify’s 4 million subscribers and 15 million active monthly users.  With this new injection of funding, Deezer has announced a global strategy plan to become the leading digital-music service world-wide, representing 5% of the music market by 2016.  Interestingly enough, Mr. Dauchez states the French company doesn’t see it’s competition as Spotify, but iTunes and piracy.

What do you think?  Is Deezer’s strategy to bypass the two largest music markets (United States and Japan) for now in order to concentrate on conquering smaller – but easier penetrable (both legally and financially) markets is a sound strategy?  Does Spotify has anything to worry about?  What should itunes be doing to compete with these streaming services?  What does it means for the music industry now that major record labels are buying large shares in digital music companies like Spotify and Deezer?  So many questions, and the story is still unraveling.

References

http://www.billboard.biz/bbbiz/industry/digital-and-mobile/business-matters-deezer-s-new-funding-puts-1007975002.story

http://www.hypebot.com/hypebot/2012/10/music-streamer-deezer-raises-130-million-round-led-by-warner-music-owner-access-industires.html

http://blogs.wsj.com/tech-europe/2012/10/08/deezers-expansion-plans-get-a-boost/?mod=google_news_blog