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The rise and fall of the SoundCloud service

SoundCloud is a music cloud service that allows users to upload their audio files. Although many have used it as a platform to store podcasts or interviews, most users used it to listen to and share songs by little-known artists.

Many DJs and indie artists have shared their creations through the platform to make themselves known. In this way, SoundCloud was gradually becoming an alternative service to Spotify. Users from all over the world came to listen to the music of different genres directly in the cloud.

SoundCloud offers the ability to upload up to 180 minutes of audio to each registered user. Furthermore, all users can listen to all the music and sound files on the platform without limits.

One of the characteristics most appreciated by users is that the music files are graphically displayed with the sound waves, and comments can be posted at a specific point in the song so that others can see listener reactions at each moment of the audio.
The paid versions, intended for artists, allow the artist to increase the number of upload minutes: from 6 hours per user to unlimited uploads.

The origin story of SoundCloud

SoundCloud is a relatively young company that was founded in 2007. SoundCloud currently has over 70 million users.

SoundCloud has its origins in a project by the Swedes Alexander Ljung and Eric Wahlforss. The platform was officially launched in 2007. It was originally designed as a service for artists to share their creations, as photographers did with Flickr.

In 2007, Alex Ljung and Eric Wahlforss started SoundCloud. Ljung was a sound designer and Wahlforss, an artist. They both worked in the music industry. The company’s head office was located in the Swedish capital, Stockholm, but the company settled in Berlin, Germany. They believed more could be achieved in Germany than in Sweden.

Why was SoundCloud founded?

So what was the reason for Alex Ljung and Eric Wahlforss setting up SoundCloud? They both thought it would be easier to share music that way. Furthermore, there were not very many options to discuss the recordings with each other. So SoundCloud was started as a sharing system where users could comment on other people’s work. Over the years, SoundCloud quickly morphed into a publishing tool for the music industry.

During the construction of SoundCloud, the Myspace company was also operational. Myspace was an excellent opportunity for musicians to spread their music. However, according to the founders of SoundCloud, this could be done much better and more efficiently. Therefore, the birth of SoundCloud began.

The rise and fall of the SoundCloud service

However, the SoundCloud website wasn’t launched until October 2008. Therefore, in the initial period, Ljung and Wahlforss mainly spent their time developing the platform. At the time, they were also busy looking for investors.

Finally, in April 2009, the first significant investment joined. Doughty Hanson Technology injected $ 2.5 million of funding into SoundCloud, which appeared to have paid off immediately.

In 2009, SoundCloud received 2.5 million euros in a round of financing. This amount was followed by 10 million dollars (about 8.7 million euros) in 2011.

In May 2010, SoundCloud had already amassed 1 million users. Indeed that could be considered a quick start.

During the following year, another large investment came from the same company. This time it was a sum of 10 million dollars. Thanks in part to this investment, SoundCloud announced that it already had 5 million registered users as of June 2011.

Following the investments of Ashton Kutcher and Guy Oseary, a public report was released in January 2012. This report mentioned that there were already 10 million registered users. Therefore, during the first four years, they had managed to reach 10 million users.

In July 2013, the platform reached 40 million registered users, in one of its most successful and growing periods. There were even seasons when Twitter and Spotify considered buying SoundCloud.

During the following years, the number of SoundCloud users continued to grow steadily. However, SoundCloud ran into some limitations. For example, they announced cooperation with Twitter in 2014. However, that cooperation soon came to a halt, in part because SoundCloud was unable to source licensed music. So in 2014, SoundCloud started talking to big record companies and tried to get licenses to use copyrighted material legally, but those negotiations led to nothing.

However, the last few months showed a lack of innovation and the impossibility of competing against Spotify. In 2016, Spotify had generated more than $ 2 billion in revenue, while SoundCloud barely reached $ 57 million.

What started as a service for artists to share their creations has diminished. The public now prefers Spotify to listen to their favorite songs and groups.

After laying off 40% of its workforce, SoundCloud continues to “barely scrape through” and seeks a strategy to relaunch the business and survive the tough competition.

  • 2015: Twitter shows interest in acquiring SoundCloud. The deal does not take place in the end due to a report that questions SoundCloud’s figures.
  • 2016: Spotify shows interest in acquiring SoundCloud, but eventually refrains.

The SoundCloud revenue model

SoundCloud has made a lot of money in the form of investments. This money was used to expand the platform further. At the same time, funds had to be raised in other ways. Due in part to this, SoundCloud decided to provide additional services to paid users. With these services, users could remove the ads, among other features. It was also possible to listen to music offline at the cost of $ 5 a month.

SoundCloud also released SoundCloud GO+. This service granted access to premium music, without previews or ads and with the ability to listen to music offline. SoundCloud GO+ contains more than 150 million songs. The fee for this service is $ 10 per month.

Obstacles on the road to success

With over 70 million users, SoundCloud has grown into an incredibly large platform. On the road to success, they had to deal with some obstacles. For example, in 2017, they announced that two offices (in London and San Francisco) would be closed. With this decision, they tried to turn a profit. The result was the forced resignation of 174 of the 420 total employees. The rest of the staff remained active in the Berlin and New York offices.

In August of the same year, one of the founders decided to leave. Alex Ljung, initially a sound designer, decided to transfer his duties to Kerry Trainor. Trainor, with some experience under his belt, became SoundCloud’s new CEO. He was previously the CEO of Vimeo.

SoundCloud MP3 Downloader

You can download tracks once you have signed in to your SoundCloud account by clicking on the download file button beneath the waveform. But not all tracks are downloadable.

With SoundCloud to MP3, you can easily convert and download music files in high-quality MP3 format. All songs are downloaded with the highest quality, dependent on the uploaded quality to SoundCloud.