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The Potential Death of SoundCloud Should Scare Music Lovers

Photo: Saner Gulsoken/Getty Images/iStockphoto

SoundCloud — the popular music-and-podcast service that is the closest thing on the internet to a YouTube for audio — appears to be in dire straits. Yesterday, TechCrunch reported that in an all-hands meeting this month concerning layoffs that affected 40 percent of the company’s staff, management revealed that the site only had enough runway left to get them to Q4 of this year. That’s only 50 days from now. (SoundCloud disputed the figure, telling the site it was “fully funded into Q4” and speaking with investors.)

It’s one thing if the end of SoundCloud simply meant the discontinuation of one way to listen to music — there are plenty of other ways to stream audio online, including YouTube itself. But SoundCloud hosts music, and its disappearance would mean the simultaneous disappearance of hundreds of thousands of hours of audio — music, podcasts, radio shows, random gobbledygook, all stored on SoundCloud’s no-doubt expensive servers. Just as importantly, the website’s demise would mean the end of a scene: SoundCloud is the birthplace of its own genre and musical community, a DIY branch of hip-hop so closely identified with the website that most people call it SoundCloud rap.

SoundCloud rap has gotten important enough for the New York Times to call it “the most vital and disruptive new movement in hip-hop” in a report just last month. But without SoundCloud, it’s unclear what would happen to SoundCloud rap, which has taken advantage of the platform’s bare-bones ease of use and free hand. In important ways, the service is the uncontested most popular music platform, in a very literal sense of popular. It’s for anyone, with a lower barrier to entering, uploading, sharing, and commenting than any other music service.

You might wonder why a hugely popular, culturally important service is failing, but like everything, it comes down to money: SoundCloud has never really figured out how to extract money from its users, both creators and consumers.

We’ve written before about how difficult it can be to create sustainable business models off of creative platforms. The platforms that have often been the most effective at generating lasting digital culture — images, ideas, videos, memes — have often struggled to find a sustainable business model. Creativity can often breed a kind of forbidding insularity that stunts growth. Supporting often wild platforms with ad sales doesn’t seem to cut it. Not just wild, but sometimes legally dicey: Hip-hop samples and DJ remixes pose copyright problems for the music industry, which is already famously convoluted when it comes to licensing and copyright.

It’s not that SoundCloud didn’t try to make money. On the creator side, SoundCloud offers hosting plans that range from free (three hours of hosted audio) to $15 a month (unlimited). Unfortunately, when your target customer is a young, independent musician, the pricing could be a significant barrier to entry. Less compelling content means fewer people who want to listen to it. Some analysts, according to TechCrunch, say SoundCloud monthly streams have fallen to half of what they once were. The consumer side is less appealing: The service offers Soundcloud Go, $5 and $10 tiers that do things like eliminate interstitial advertising. But the platform lacks the sheer breadth of a catalogue like Spotify or Apple’s streaming services, making it an uncompelling option for music fans looking for the latest and greatest.

That these pricing options didn’t work — and that so far the internet hasn’t been able to make creative platforms profitable — doesn’t mean that SoundCloud could never work. One thing that’s become clear in the last few years is that fervent fandoms are much more willing to directly support artists they value than they are to pay blanket fees for broad services. Compare SoundCloud to the music marketplace Bandcamp, which also offers artists free streaming options, or a streaming site like Twitch. Both of those sites, and others, give users the option to pay money directly to content creators, either for downloadable MP3s, or in a monthly subscription. In exchange, the services take a small portion of the proceeds for themselves. There’s plenty of evidence that a user will pay $5 a month for content if they know exactly who’s on the receiving end. With SoundCloud’s model, users were just throwing money into a big pot and hoping their favorite musicians got some revenue from audio ads and subscription fees.

Even with a smarter business model, SoundCloud would face problems. It’s a platform that’s all about audio, a media format which is uniquely hobbled when it comes to going viral; as Stan Alcorn explained on Digg in 2014, audio has trouble going viral the way video does because we tend to listen to it in contexts where sharing is impossible, and because it’s impossible to skim or preview. And issues with copyright and sample clearance will never go away.

But the lesson to take away from the SoundCloud crisis isn’t just that creative businesses are difficult to sustain online, or that the company wasn’t quick enough to find a lasting revenue stream. It’s that as we move creative scenes from cities and neighborhoods and onto the web, we outsource the publishing, storage, and archiving of their products to young, for-profit businesses — and therefore run the very serious risk of losing huge and important libraries of culture to the vagaries of a new and quickly moving economy. Thinking about SoundCloud it’s hard not to be reminded of Vine, the hugely influential video-sharing app that was unceremoniously shut down by Twitter last year: Not only did the web lose one of its most vibrant spaces, any videos that disappeared from the service were gone forever. It’s not an accident, either, that, like Vine, SoundCloud’s culture is primarily steered by nonwhite contributors.

It’s true that SoundCloud might still be saved — it could be acquired by a larger company, or it could secure a loan or more investment. Chance the Rapper tweeted “I’m working on the SoundCloud thing” this afternoon, so maybe he can fix it. But while new owners or new investment might save SoundCloud the business, they wouldn’t necessarily make the archive safe.

This week’s news has artists and music fans warning each other across the web to make offline backups of stuff that they like, lest the service go belly-up, spawning a constellation of dead hyperlinks. That might save some of the content — but only a complete archive would preserve the SoundCloud scene, from the genius to the terrible, for future academics, musicians, and fans. Unfortunately, absent some funding geared toward that essentially charitable act, such complete archiving is likely out of the question. According to Jason Scott of the nonprofit Internet Archive, SoundCloud’s repository of audio is a petabyte of data — one million gigabytes — and would cost $1.5 million to $2 million to host for the foreseeable future. Maybe they should give Chance the Rapper a call.

The Potential Death of SoundCloud Should Scare Music Lovers