Soundcloud: Research

What is SoundCloud?

SoundCloud, founded in 2007, is an audio platform that enables so-called sound creators
to upload, record, promote and share their originally-created sounds on the internet,
building their audiences worldwide.1 Its ultimate aim is to build the world’s largest social
sound platform.2 It claims to allow any listener to hear the world’s sounds, and explore the
largest community of artists, bands, podcasters and creators or music and audio.3

It was originally started in Stockholm, Sweden, but was established in Berlin, Germany in
August 2007 by Swedish sound designer Alex Ljung (CEO) and Swedish artist Eric
Wahlforss (CTO), initially intending musicians to share recordings with each other, but later
transforming into a full publishing tool allowing musicians to distribute their music tracks.

The company itself is privately held, with 190 employees, with headquarters in
Greifswalder Straße 212-213 Berlin, Germany. 4 Its two other key persons are Dave
Haynes (VP Business Development) and David Noël (Evangelist and Community
Manager).

A few months after it began operating, SoundCloud began to challenge the dominance of
Myspace as a platform for musicians to distribute their music by allowing recording artists
to interact more closely with their fans.

In a 2009 interview with Wired, Alex Ljung said: ‘We both came from backgrounds
connected to music, and it was just really, really annoying for us to collaborate with people
on music—I mean simple collaboration, just sending tracks to other people in a private
setting, getting some feedback from them, and having a conversation about that piece of
music. In the same way that we’d be using Flickr for our photos, and Vimeo for our videos,
we didn’t have that kind of platform for our music.’ 5

Its most recent hire is new Vice President, Platform Manolo Espinosa, who moved from
Head of Audio at SoundCloud.6

Today, SoundCloud reaches over 180 million users per month, or 8% of the Internet, and
users post up to 10 hours of audio and music every minute.7

1 http://www.linkedin.com/company/soundcloud
2 https://www.facebook.com/soundcloud/info
3 https://soundcloud.com
4 http://www.linkedin.com/company/soundcloud
5http://www.wired.com/business/2009/07/soundcloud-threatens-myspace-as-music-destination-for-twitter-
era/
6 http://www.linkedin.com/company/soundcloud
7http://techcrunch.com/2013/03/11/soundclouds-new-moving-sounds-feature-holds-promise-for-ads-viral-
content-like-tumblrs-gifs/
What are the key active features of SoundCloud?

One of SoundCloud’s key features is that it lets artists upload their music with a distinctive
URL, which means that its sound files can be embedded anywhere, allowing it to be
combined with Twitter and Facebook to let its members reach their audience more easily.

Its most recent integration has come from Google and Google+, as announced by David
Glazer, Google’s Director of Engineering on May 15, 2013, which means that
SoundCloud’s links will be actively displayed in Google’s socially-relevant search results,
based on the Google+ users that a user has connected with on SoundCloud, making the
discovery of new music, or what your friends are listening to even easier.8

The software distributes music using widgets and apps, with users placing widgets on their
own websites or blogs and then it SoundCloud will automatically Tweet ever track
uploaded, as well as an Application Programming Interface (API) allowing other
applications or smartphones to upload or download music and sound files, currently
available for iPhone, iPad and Android platforms.9

The API has been integrated into several applications, and web services, including
Songkick and FourSquare.10

The software depicts audio tracks graphically as waveforms, also allowing users to make
timed comments on specific parts of the track, as well as standard features such a reposts,
followers and sets, seen on many social networking sites.11

Given its freemium business model, SoundCloud offers additional features to users who
pay for subscriptions, after registering for free. These users are given more space to
upload and distribute tracks and other recordings to more groups and users, as well as
creating sets of recordings, and more easily track the statistics for each of their own tracks.
The depth of the statistic data provided to the user is what varies with its different
subscriptions, the most advanced including the number of listens per track per user, and
the originating country of each individual listen.12

Co-founder Alex Ljung also highlights the fact that SoundCloud does not run ads as a very
important part of the software. Further to the freemium model, users that pay for premium
features and additional recording time provide the major income that drives the company’s

8 http://blog.soundcloud.com
9 http://markledden.wordpress.com/2011/01/21/soundcloud-symbian-what-are-the-options/
10 https://blog.soundcloud.com/tag/foursquare/, https://soundcheck.soundcloud.com/music/integrations-re-
introducing-songkick/
11 http://soundcloudpromotion.com/soundcloud-reach-to-millions-of-music-lovers/
12http://help.soundcloud.com/customer/portal/articles/247820-what-s-the-difference-between-each-
subscription-level-
profits. He says that ‘it aligns us with our users, they vote clearly if they think we’re
generating value.’ 13

Furthermore SoundCloud allows users to upload their sounds under a Creative Commons
license or a public domain declaration.14

13 http://www.fastcompany.com/most-innovative-companies/2012/soundcloud
14 http://creativecommons.org/tag/soundcloud
Who has invested in SoundCloud?

After previous investments from Doughty Hanson Technology Ventures ($3.3 million Series
A in April 2009) 15, Union Square Ventures and Index Ventures, SoundCloud raised $50
million in funding from investors, led by Kleiner Perkins Caufield & Byers (KPCB), along
with GGV Capital, announced in a press release on January 23, 2012.

Alex Ljung commented: ‘SoundCloud has seen exponential growth this year in therms of
users and greatly evolved our product offerings. With Kleiner Perkins’ impeccable track
record for recognising and investing in companies with a long-term view, and their
understanding and support for the potential of sound, we couldn’t be more excited about
working together.’

Mary Meeker, parter at (KBCP), has now taken a board observer seat at the company,
after previously serving on the board of Square, and is actively involved in KPCB’s
investments.16 


15 http://www.doughtyhanson.com/technology-ventures/news/2009/15-04-2009.aspx
16 https://soundcloud.com/press/releases/2012/01/02/kleiner-perkins
What are the latest major changes to SoundCloud?

When SoundCloud was first founded, its was in a high-growth phase, so there was limited
time for implementing a straightforward search feature, so open source enterprise search
platorm Apache Solr was used, implemented in two days. This works well on a small scale,
but as the amount of data grew, entries became more complex, and problems began.

In early 2012, many new features and enhancements were difficult to apply using the
existing infrastructure, so a new team was formed, and infrastructure was rebuilt from
scratch.

This brought along some new key goals to the company, (a) velocity, (b) reliability, and (c)
maintainability.

The new infrastructure was released in a dark launch on its beta site, receiving positive
feedback on the time-to-search, with newly-posted sounds discoverable in about 3
seconds, and changes to the software could me made as an immediate live swap. If there
were any problems with the new version, it could be undone.

Accompanying this new change is the new Suggest feature, allowing you to jump straight
to the sound, profile, croup, or set that the user is looking for, and with the new advanced
search, the user can easily find their music even if they cannot remember the spelling of
an entry, or its exact name, the feature allowing the software to effectively make
assumptions and customisations as a result of the new structure and semantics of the
data.

This suggest infrastructure is separate from the main search cluster, and a custom search
engine was built instead, based on Apache Lucene’s Finite State Transducers, allowing
suggestions to appear straight after a keystroke into the search.

Furthermore, the new Explore feature is based on the new search infrastructure, allowing
sounds to be showcased in the SoundCloud community by a time-sensitive ranking, rather
than necessarily ‘best-matching’ results like the Suggest feature.17

On March 11th 2013, SoundCloud also announced changes to its subscription plans. It
previously offered five different tiers to its service, but is now changing the range of options
to three for individual users; free, Pro and Pro Unlimited, as well as new beta plan Pro
Partner, all (except ‘free’) with higher upload limits and more comprehensive analytics, at
lower monthly and yearly rates, replacing the existing free, Lite, Solo, Pro and Plus. The
new Pro plan is essentially the same as the old Lite plan, but with newly improved
analytics, and Pro Unlimited allows for unlimited storage. All paid services have discouts
available to those who subscribe for a year, upfront.

The Pro Partner beta’s newest feature, Moving Images, provides the ability to create more
visual profiles with banner images, allowing images to appear behind a track when it plays.
The repost ability is also possible with these moving images, and this new feature may
allow for non-invasive advertising, still keeping in line with Ljung’s freemium model.18


17 http://backstage.soundcloud.com
18http://techcrunch.com/2013/03/11/soundclouds-new-moving-sounds-feature-holds-promise-for-ads-viral-
content-like-tumblrs-gifs/
What is the latest news on SoundCloud?

Getty Images
In October 2012 it was announced by Hypebot.com that SoundCloud has partnered
with licensing company Getting Images in an attempt to simplify music licensing, in
a feature that allows users to make selected tracks available for sync licensing
within the SoundCloud player, and commercial users to request a license by clicking
a ‘license’ button on the player. However, the cost is high to artists. Flat fees begin
at $99 for website use, $200 for a one time podcast play, and $1,500 for wider
corporate usage, as well as more specific costs for an ad or film, in which they must
call Getty Images directly.

This would seem like a good idea for an upcoming artist, however, to be eligible for
placement, the artist has no control over how their music is used, as the company’s
FAQ reads ‘Your agreement with Getty Images Music allows us to license your
music to any client who is willing to pay money for its use. The agreement you sign
pre-clears all of your music for potential licensing.’ The company claims that ‘pre-
clearance is a strong selling point for our clients who are more likely to use music
that causes them less hassle.’

If the music is licensed, the artist will receive only 35% of the upfront license fee,
plus 50% of Getty Images’ share as licenser. It would also seem apparent that the
artist is giving Getty Images Music the right to rename or retitle your songs.19

Social Media Remarketing

More recently, in February 2013, Social Media Remarketing announced services to
buy SoundCloud followers. Naturally, users will be hesitant to follow an account
unless they already have a large base of followers, and so it is difficult for up-and-
coming users to promote their music. This new service will provide a boost to kick-
start their pages, allowing them to attract new followers, increase visibility, create
greater feedback and provide endorsement for your efforts.

They come in three packages of accounts, Follow Me (1000 followers for $19.95),
Friends for Life (2,000 followers for $29.95) or Role Model (3,000 followers for
$34.95), with a five, seven and nine day turnaround respectively, all with a money
back guarantee.20

19http://www.hypebot.com/hypebot/2012/10/soundcloud-getty-partner-for-licensing-musicians-lose-100-
control-paid-35-50-of-s.html
20 http://www.sbwire.com/press-releases/sm-remarketing-announces-service-to-buy-soundcloud-
followers-275642.htm