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Rumors about Soundcloud... and what that should tell us

posted on #1
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Hey folks,
The other day, I talked to someone about how things evolve around the web and mentioned Soundcloud,
and the instant response was "now, aren't they broke?".
Well, I've made it a habit to read the wikipedia article on Soundclouds development once a year, and to be honest, knowing the numbers in there a little, I was rather surprised they seemed to openly admit to be broke by now, while the fact that they'd be at some point didn#t really surprise me that much.
To verify if there was some kind of public announcement by Soundcloud out there which may have caused the rumor, I googled around a little and stumbled across the below-linked recent article on a site called "theverge" -
before you click, that is a really long read there, so maybe let me say a few things ahead:
First of all, I didn't find any evidence of Soundcloud itself saying they had reached the end of the line, so these are unconfirmed "fake news".
Still, the article points at several issues that do seem to exist, and the wikipedia entry on their business model (consisting mostly of: taking more investor cash next year) lacks any signs of health... looks like there might be trouble around the corner.

What struck me the most about the way the TheVerge-Article evaluates the situation and seemingly states what "creatives" are after is that they point at three major mistakes made by Soundcloud:
- not paying money to musicians who get many clicks
- allowing people to spam each other with "reposts" of their own tracks, leading to some sort of black-market for tricking statistics and recycling tracks to stay visible
- not having come up with a somehow sustainable working financial concept

I found these three things most interesting, the first made me wonder if Soundcloud ever had at any point promised anyone to pay them for clicks (not that I'd know,do you?), so,to me, this seems like one of those cases of
"If 17-year-old-girls get payed by youtube for having a channel on make-up use, I have a right to get payed for 50.000 listeners elsewhere, too - and if that expectation is not met, I'll say that other site sucks.".
I know these kind of misperceptions fairly well, and I've repeatedly talked about especially YouTube having created wrong expectations and realities all over the place, just because money never really mattered that much for them after having been bought by google.
That is annoying when you notice it in single individuals behaviour (like the so-often quoted "I can get away with breaking copyright on youtube, why can't I on wikiloops?"), but to see something like Soundcloud go down because of the big players twisted realities does give me some goosebumps.
Mind, they offer payed accounts, but if the shizzle hits the fan and the investors roll out, the whole thing might go down including the payed accounts, simply because the company ceases to exist.
Ever lost your online audio archive to something like that? That does hurt.

Then, the "reposting"-issue...
You may imagine I was a bit glad we never introduced any "suggest for remix", "remix request" or other function on wikiloops which would have allowed spamming each others profiles.
Too bad people will end up abusing such functions, and if they didn't foresee that and implement smart filters to prevent that kind of thing, then they really missed a human reality.
Thinking about it, facebook does a phantastic job on limiting such spam posts - they just reduce your reach automaticly if you keep posting irrelevant stuff (not that I'm a fan of FB, but they do social manipulation so beautifully well, Göring would have nodded in approval).

Last, concerning the failure to come up with a working funding concept - well, I can relate to that, you know :)
I loved the user comment below the article which states:
"it was all cool as long as it was all free", and now theres talk of it being possibly completely gone...
I don't know about you people out there, but to me, the whole situation of Soundcloud as described in the article can be blamed on wrong decision taking on Soundclouds end, but it also is the result of the way us small end users value and use such services.
Maybe it comes down to:
If we want to have reliable, well organized, ideally independent online services for a niche product like homerecorded audio content (we're not dealing cat photos, it is a pity), we might as well pay for that right away.
Otherwise, we'll have to live with free (or investment funded) places closing down at some point if there is no return for the investors in sight.
Well, I hope you are aware wikiloops own situation is in many ways different from soundcloud, we neither took a cent from any outside investor but stuck to asking for crowdfunding-support instead, nor did we hire 400 people and opened offices on three continents without an idea how that should be payed in the mid-term.
Still, we act on the same "market" and trade very similar "goods", so the user-expectations are similar, and the outward pressure to comply with copyright legislation / proper infringement handling, plus being compared with services like Spotify or AppleMusic (sorry, that's a completely different ballgame IMO) are things wikiloops and Soundcloud have in common.
I'm wishing the folks at SC the best of luck finding a good way to survive - and I hope for wikiloops that more and more people will start to understand that cool internet deserves financial support.
Following wrong expectations of sudden fame and fortune (+ chicks for free, right?) on a free site obviously has the potential to kill something that might have been a cool place to hang - its a box of pandorra to open, and I'm glad we kept that shut quite well on the loops so far.

Thanks for the read, and looking foreward to any sparking ideas / comments if you like :)

Article: "SOUNDCLOUD'S BROKEN BUSINESS MODEL DROVE ARTISTS AWAY" on TheVerge, July 21st 2017
Link: https://www.theverge.com/2017/7/21/15999172/soundcloud-business-model-future-spotify-streaming
"Sorry - had to do it!" - Les Claypool

yes, you are looking at the administrators signature.
posted on #2
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Joined: 09.11.16
From my Bio at Soundcloud:

EDIT: Soundcloud is just over-flooded with fake accounts and trash :/ Move along folks! You can find me jamming with real people at www.wikiloops.com :)

The spam bots, the re-posts, the fake accounts..... i'm not surprised it's going down & under ;)
posted on #3
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Posts: 247
Joined: 19.08.13
Soundcloud?
I never heard about it, never used it, never visited it.

But I know that they never contacted me and never hired me.

Well, their fate can't be compared with this site. As far as I can calculate you get 50% percent of audio uploads by 30 member-names.

My personal experience with your great site is this:"Immer wenn du glaubst, es geht nichts mehr, kommt von irgendwo ein Lichtlein her!"

Go on! Good luck!
This is a place where outstanding people do their best without getting paid! This is the social proof of a social revolution that is much bigger than anybody will imagine now!

Of course I would pay every musician (me included) with a new currency called "loopcoin". Once you get loopcoins you can give it to other people and you can pay your own uploads.

And maybe Bloomberg or another company will change your loopcoins to Dollars in some years.
:)
Was born in an analog world.
posted on #4
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You obviously didn't really understand what I was saying about being happy not to have promised anyone fame and fortune if you suggest "loopcoins", Neronick, but please, let's not discuss that here, thank you.
"Sorry - had to do it!" - Les Claypool

yes, you are looking at the administrators signature.
posted on #5
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Joined: 14.01.16
Lots of online websites offer free services...from Soundcloud, to PoetrySoup and YouTube, these sort of websites are for the creative type of people. I only see them as a 'sharing platform' therefore I wouldn't expect payment, however, I think it takes an awful lot of the peoples time who run these websites, shouldn't they get paid? I must admit, the only online website I have ever paid a subscription for is Ancestry.
Aquarians do it better! ;)
posted on #6
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Joined: 27.02.15
Can't confess to have ever got on well with Soundlcloud myself. It always felt disjointed and messy to me - just a smorgasbord of music which felt overwhelming to search through. The clutter of comments doesn't help either. Don't ask me why, but I always felt the musicians were just drowned out by the volume of everybody else's insidious attempt to promote themsleves.

I think it may be because it never really had a strong sense of purpose or mission - it just seems like a heavy-handed Dropbox for music blended with some kind of primitive attempt at social networking. It also feels like a free-for-all from the early days of the internet. Without some kind of moderating control, it'll never achieve a purpose. Wikiloops, on the other hand, stands out for its clear premise and, as a consequence, delivers exactly what it says it is. Having rules, such as 'no covers' helps focus that remit and shape the site towards its intended use. Whatever people think of rules, they do help make sense of things. Soundcloud is like some kind of Wild West for music in my opinion.

The differences in the sense of community between the two places is as stark as it is obvious by the content. Wikiloops is designed for, and with, original musicians in mind. The whole experience is geared towards collaboration, not just selfishly posting your own creations and hoping enough people will like it to get noticed. The absence of individual need to promote or make money from their output on Wikiloops is the very thing which makes its special blend of camaraderie and support unique. Long may that continue.

Soundcloud certainly never felt like a site geared towards musicians promoting their music, more a second-rate site for people to rip off albums. Kinda like YouTube but without the intelligent copyright control...

LadyP, on the other hand, uses Soundcloud a lot but only to specifically follow certain DJs.
Edited by mpointon on 20-10-2017 10:03
posted on #7
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And, with my devil's advocate hat on, if Wikiloops was as popular as Soundcloud, would it suffer the same level of trolling and spamming? With global popularity comes the trolls...
posted on #8
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I've been thinking on this a little longer, maybe I can add a few more thoughts reflecting on what Stella and Martin said and offer some more bits of information that may explain a little more why I am in some way touched by the SC-situation.

I believe I coded my first website somewhere around 2003 or 2004, and at that time, hosting audio and having a player on ones own website required a lot of fiddling, and when soundcloud came up, that was a big step ahead for small hobby producers like me- they offered free hosting and an embeddable player quite soon, and had I not been the nerd I am, I might have quit coding and just copy-pasted their player wherever needed.

The comment-flags which were displayed within the audios waveform to allow commenting on a certain moment of the piece were another cool thing they came up with, and they displayed a waveform long before I had any idea of how they could do that (such displays were reserved to 500$+ audio software at the time). So, yes, I have grown some admiration for their development, without ever using soundcloud much myself.

When wikiloops came around and I slowly slowly realized how costly such a project would eventually become and how expotentially costly such a project gets once it really goes viral.
I think its true to say that of six years of operating wikiloops, I have spent the first four years worrying that the desireable "wow, we've been mentioned by some famous facebook musician and are getting 100.000 extra visitors today" would instantly lead to the server going down, and quite a lot of months coding for no other purpose than delaying the need for more costly servers.
That view on things made me look at other websites in a different way, and while I was trying to balance funds & functionality as wikiloops evolved and grew, I noticed most other larger projects (among them SC) went another way and kickstarted themselfs with huge investment sums, while offering free service at a very costly state-of-the-technology level.
wikiloops offered uploads in mp3 with a maximum of 5MB(!) in 2011 while SC was offering 100MB wav sharing and online file-conversions for free - that must have cost a lot of money, so they had to be way ahead of their revenues at all times.

There is that legend about the founders of YouTube, stating they would have been plain broke within 8 weeks if they would not have been able to sell the project to google just in time - the server needs just outran the two initial founders budget capacity too quickly, and chances are the SC folks were hoping for the same thing to happen at some point, thinking that would be the end of all problems.
I don't know, and it really always made me wonder how on earth the SC folks were able to convince investors to give larger and larger sums each year, one would think they must have presented some kind of profitable concept the investors went for, but chances are these investments were made in the lottery-kind-of-mode, with the gigantic gains made by early apple or ebay stockholders in mind.
So much for my own view and motivation to keep an eye on what goes on- now let me try to connect some SC-steps to my personal experience as a webmaster/community operator:

One of the first platform change made by SC that was noted on wikipedia was "A move to make the service more attractive to listeners", followed by complaints by the creatives who were more happy with the previous layout.
Why did they do that? I can imagine two reasons: First, they realized "Our creatives want to get heard, let's try to get them some audience!",
then the thought went "Yeah, and if we can attract listeners, we'll have much more people interested in our service, that will impress our investors, too!"
So they changed the site from something creatives loved to something listeners could do with, and that couldn't be done without shifting to more presentation, more importance on (cover-)images and fancying smooth looks over functionality designed for creatives - and the original community boo-ed.
I have been dealing with requests and suggestions to "make wikiloops more attractive to listeners!" for as long as the project exists, and the whole radio / album segment of wikiloops was born that way, but I have always been aware of the need to keep the "collaboration for the fun of it"-aspect of wikiloops more prominent and have been quite reluctant to even experiment with anything that might go too far into catering to listeners, presenting the best-of-album or having a listener charts rating.
That decision didn't make wikiloops any more attractive to anyone, but at least we are still doing what we intended to do around here: having fun and encouraging each other to jam. That's simply not what listeners will do, if you look at it that way.

Now, Martin and eGil both mentioned the Trolls/Fake account-Issue.
What do you think is the main reason not to take immediate action and block fake accounts and trolls?
I can only think of two reasons:
Either, you have totally lost controll of your own platform and simply are not capable to prevent that (and seriously, its not that hard, maybe signup gets a little more inconvenient for new visitors, but that's definetly no reason to let the bots walk in free).
The other reason why one would not take action is rather wicked:
Trolls and Bots look really good in statistics(where they show up as "users", of course), and I can tell the investors my platform has grown by 266% last year.
I can even go as far as bragging about "each tracks gets an average of 4.8 comments" without mentioning that half of those are left by bots. I have no proof that was SCs strategy there, but its the best logical explanation I can come up with why they did not solve the problem.
And again, I'm familiar with the problem of needing to present promising statistics to potential sponsors, and if I have a choice to tell them 50k musicians signed up or to tell them 2.5k musicians ever actively uploaded to wikiloops, then I know what they will find more convincing.
I'd like to add that I'd guess that we have around 2k bot registrated accounts in those 50k, but I was able to stop the bot-flood sometime in 2013.

From what I can tell, i'd say SC was pretty much forced to go down the route they did, simply because they knew they'd need to convince the next investors round come next year, and they managed to stay in the game for quite long and quite well.
But when YouTube finally settled deals with all major labels and artist representation agencys within the past two years, moving a huge part of creative content from an "illegal grey zone of piracy" to a well organized, legally safe and approved by all parties (maybe except the musicians, but that's another story) system, that changed the internet from "we are all operating in a grey zone, let's sit and wait"-situation to "if youtube can do it, whoever can't will have to go"-situation.
And SC doesn't seem to be able to pull such deals off.
If you want my opinion why: I think being the worlds second-largest search engine (youtube is) and being owned by the largest one (google), youtube had so much power negotiating along the lines of "well, if you do no want to settle with us and want to risk not happening on the places that cover 98% of all web searches, you are free to walk away" - and soundcloud being a pure audio host can't possibly pull that off in a similar way.
We will witness how their story continues, and seriously, I'm wishing them the best.

My personal conclusion from all this and my own experience with struggling to operate wikiloops in a safely funded zone come down to:
If we set out to operate a website build around something which is only relevant for a small group of people (anything smaller than 20% of the population let's say), our chances of having a raging viral success are limited from the start on.
Things like eBay, Facebook and YouTube work for 90% of all people, that's a different league to offering music.
And even if you feel like saying "But music is in demand by 90% of all people as well", then you are right, but the majority of that demand is met by what the media feeds to the people, and "actively browsing for unknown music" is a hobby which is rather rare, right?
Now, wikiloops is a service for a sub-segment of people who love to "actively browse for unknown music", namedly the group of people who play an instrument themself.
Are we still above 1% of the population in your calculation? I'm not sure!
If we take into account that becoming active on wikiloops is only interesting to the split portion of people who do not only play an instrument, but also do homerecording, then we should come to terms with accepting that it is very unlikely that any of the big players concepts will fit for our aim.
To make the mistake to promise either the investors or the platform users any raging success or financial return "once the thing lifts off" will only lead to ending up in a bad situation once it becomes obvious that will never happen -
and you will find yourself struggling to meet the expectations you created by coming up with new promising features... which will only lead away from your initial idea and delay the moment of owning up it will not work (why do I think of skype here? they are the master-of-delay in that regard, that service never earned a dime and is still out there).
Once again I feel very lucky I do not have any outside investors expectations to meet and have(hopefully) not promised more than what wikiloops can keep to anyone.
I always admired the wikipedias approach at funding a cool project in a different way, but had to realize that their concept will also not work for wikiloops, most likely because the wikipedia also offers something interesting to 90% of all people, plus they have the benefit of arguing that knowledge collection must be kept independent from commercial sponsors - that logic obviously doesn't really work for jamtracks.
Thats been a bitter pill for me, but at least we are still around and there is no reason to worry about wikiloops delivering its small niche service for some time to come.
The only possibly disappointed investors would be those who donated in the past and me myself, which gives me the freedom to steer away from making some of SCs mistakes.

While SC probably has very little chance to close the huge financial gap by getting end users to pay now (they have hundreds of employees to pay, buildings, server farms...),
we still have a good chance to get enough users to wake up -
wikiloops basicly doesn't need much more than 600 people who give 5 bucks a month to strive and survive,
or 300 who give 10.
Or 30 individuals who can afford to give 100 bucks a month.
That's a lot of platform for very little money once you realize that, and maybe the whole myspace & soundcloud experience will help a little to let people realize what can work and what will not.
The internet is still fairly young, so we are all still learning what may work and what will not.
Those still seeking fame and fortune as musicians in the digital age can call wikiloops as a pure-fun playground boring if they like.
I do think wikiloops is a cool thing to have, and I'm coming to terms with the idea that it is OK to tell people they will have to chip in with some bucks for their fun.
I've been saying that all along, but maybe people take some time to realize what is going on, and maybe the whole SC story helps to point out exactly what I have been trying to avoid here, and what has been possible thanks to the help of those who do support.

thanks for the read :)
"Sorry - had to do it!" - Les Claypool

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