SoundCloud Raises $60 Million at $700 Million Valuation

http://techcrunch.com/2014/01/25/soundcloud-raises-60-million-at-700-million-valuation/

by aritraghosh007 • 12 years ago

161 59 12 years ago

Keyframe2• 12 years ago

Wonderful! Anyone knows how they have tackled possible copyright issues? I know youtube had serious trouble with it and, if I remember correctly, google forks over lots of money each year to keep the lawsuits away. How could a startup which isn't big as google mitigate that?

jurre• 12 years ago

There's much less of a culture of posting other peoples work on soundcloud, it's much more focused on letting artists share their own work.

kristiandupont• 12 years ago

You might be right in terms of proportions, I don't know but there is plenty of copyrighted material on Soundcloud not belonging to the poster.

Keyframe2• 12 years ago

Quick search yielded numerous copyright infringements. Not even remixes, plain pirate material. So I am wondering how does it work on business side, how do you defend from it? Same question would be appropriate for imgur too. How can you shield yourself from it if you're a small startup with no cash? You wait for legal papers to flow your general direction and hope for a deal?

NoodleIncident• 12 years ago

To add to what others have said, there's no real point in posting copyrighted content. No ad revenue, it's hard to search for, and the free tier has limited storage space to do so.

The people who pay for SoundCloud pay for it because it makes them money, and the only way to make money like that is to have something worth selling (your own stuff).

texel• 12 years ago

They've got fairly aggressive automated systems for identifying and flagging material that's registered with rights-management agencies. It works for both individual tracks and material featured in mixes. I've even had my own music taken down preemptively before since the label had already registered the forthcoming track. I was able to fill out a form with some personal info and they put it back up pretty quickly, but it was still annoying (though I completely understand why they have it set up that way).

Not sure how other people are confounding the detection algorithms. They're even resilient to changes in pitch. As a result, a lot of DJs I know can no longer post mixes to soundcloud and have to use other means.

CSDude• 12 years ago

Off-topic but it is blocked in Turkey as it contains a phone recording of PM about a corruption. Such a succesful company, is blocked in 4 hours without a warrant. Anyways, happy to hear the news, I know many friends using it here to share their songs or productions.

https://soundcloud.com/haramzadeler (in Turkish)

ddorian432• 12 years ago

PrimeMinister? So they just block it and everything goes on?

justincormack• 12 years ago

Well no, thats not the only thing they have done to obstruct the corruption enquiry, they also sacked/redeployed many of the people investigating it, police etc.

k-mcgrady2• 12 years ago

I've been using SoundCloud for several years. It's a great service and they have a decent business model. They're actually charging for useful things (stats, storage) meaning the don't need to shove ads down our throats. If they start going down the road of licensing content I'm not sure exactly how that will change the service. Will they start running ads? I hope not. If they start licensing large amounts of music they will just become another streaming service. At the minute they have a good thing going. They are a good place for artists to upload promos, demos, mixes etc. and I hope that doesn't change.

jordhy• 12 years ago

This sounds (no pun intended) as a very reasonable valuation for SoundCloud. They are doing a great job and deserve every penny of those 60M.

return04• 12 years ago

To be more precise, in the current climate, it's undervalued.

thisiswrong• 12 years ago

SoundCloud is great. You really get the feeling that you're being empowered as a content consumer and creator. This is because SoundCloud really doesn't give a shit about the making people listen to what the copyright monopoly wants people to listen to (ie J Bieber/M Cyrus). YouTube is the complete opposite. You log onto Youtube and it feels like MTV all over again.

SoundCloud will become HUGE for this ability to empower its users in a way that no other streaming platform has done before. But as VC money flows into SoundCloud it will become crappy like YouTube, Deezer, Skype, Tumblr, and most other start-ups that end-up loosing the original spirit of their founders.

blisterpeanuts• 12 years ago

Youtube has become very commercialized, true, but you can still use it exactly like SoundCloud, can you not? Just ignore the ads and recommendations and it's basically the same experience.

Although, it does seem like SC is a cleaner, more targeted audio platform.

mcormier• 12 years ago

YouTube is good for previewing but the audio quality is horrible. 128 and the algorithm for compression makes a lot of things sound washed out.

boyaka3• 12 years ago

I wouldn't say it's the same experience. Youtube is cluttered and music is a side offering, primarily in the form of music videos. Song-only videos have been notorious for being posted by somebody other than the owner and not existing reliably (copy infringement). Soundcloud makes a home for your song that can be shared forever, is pleasant to visit, and links you to tons of related music and explore the musical interests of other people that like that music.

vonklaus• 12 years ago

Having a cleaner more targeted platform goes a long way. The bandwith consumption is a lot less on mobile and content specific communities often provide a more-targeted user-centric experience. They are quite similar, but sometimes being a little different, a little more focused, and more niche can go a long way.

edit: I also do not think these services are mutually exclusive.

quadrangle• 12 years ago

Ignore the ads? Why the heck are there ads? Why aren't you being responsible and using Adblock?

chii• 12 years ago

the long standing problem of such new media companies such as soundcloud is a revenue model. What is their revenue model? ads? sale of music (ala itunes style)? Mix of both? sponsorship from artists trying to promoting themselves?

bnr• 12 years ago

Uploads are limited unless you buy a premium account.

k-mcgrady2• 12 years ago

As an artist SoundCloud is something you want to pay for. You get better stats (location, source if it's an embed, soundCloud users who have listened to you), customisable embed widgets, and more storage space for your uploads (them limit if by time, not file size). If you see a SoundCloud user with a little orange star beside their name they are a paying member and there seem to be quite a lot based on what I see when using it.

uniclaude• 12 years ago

But as VC money flows into SoundCloud it will become crappy like ...

I hear you, but I'm quite confident the site is going to stay good for a while. Then, given that storage and bandwidth might become cheaper, we would see some startups emerge and target those who would have been "abandoned" by this hypothetical evil, VC-funded Soundcloud. Musicians would then leave Soundcloud like they left Myspace, so let's not worry too much and enjoy Soundcloud for the moment, because it's still a good product.

Let's not forget that we're talking about D series, and if they could keep this focus so far, I'd say we can at least try to have a bit of faith in them.

Kiro3• 12 years ago

I agree about SoundCloud and use it for most of my music listening but I don't agree about YouTube. If you're into EDM YouTube is great as long as you follow the channels that promote the music you listen to. Very similar to SoundCloud actually.

film42• 12 years ago

I consider SoundCloud to be more like Vimeo than youtube. Always about the creator and viewer. Remember, SoundCloud, like Vimeo, has paid plans.

joelrunyon• 12 years ago

But as VC money flows into SoundCloud it will become crappy like YouTube, Deezer, Skype, Tumblr, and most other start-ups that end-up loosing the original spirit of their founders.

Wow that got negative quick.

benched• 12 years ago

It's pretty simple. Greed = desire for largest market = lowest common denominator.

blablabla123• 12 years ago

Youtube has a much higher diversity than SoundCloud, regarding both mainstream and non-mainstream music. Obviously there are some really good niches they work in, Drum&Bass for example, but in other categories they kind of suck.

Not really sure why one would prefer a music platform that celebrates low diversity.

JonnieCache4• 12 years ago

My favourite internet company. As soon as it came out, it was clear that it was going to be a big deal. Pretty much every electronic musician I know dumped myspace like a hot potato and eagerly started using SC. The punks took a little longer, but they're there as well now.

All the decisions they've made since then have kept it on the right path. I've said it here before, I think their strategy of keeping souncloud.com itself aimed solely at creators, and having consumers come in through other sites via the API, is genius. If the new VCs try and dissuade them from this, I will be very sad. At least try and make any new discovery/listening features a separate app on a separate domain, please? "content deals with major music labels" sets alarm bells ringing for me.

(Of course the cleverest part was their decision to actually accept substantial amounts of money from their users :)

EDIT: also can you use some of that money to up the streams from 128 mp3? at least ogg or something? my tunes (link in profile ;) which I spend so long mixing sound super-watery on there, which is a shame because that's the main way people listen to them at this point.

ams6110• 12 years ago

The other interesting angle you mentioned is how myspace managed to lose the last niche of users they had, musicians. I guess at that point nobody was really minding the store there, if they ever were.

return04• 12 years ago

What i don't understand is why they haven't implemented a "buy song" or at least "tip the artist" a-la flattr. I don't think it would degrade the experience and would remove the hassle of setting up a separate bandcamp/whatever page.

JonnieCache4• 12 years ago

They have that. You can fill in any url as the "buy link" and it gets linked as "buy this track" or whatever, at the bottom of the player, next to the download link.

Seems like kind of a stopgap, I imagine it was something users really wanted and this was a way to do it with almost no engineering effort. Maybe an actual retail section is part of their plans...

strict9• 12 years ago

SoundCloud is on my top 5 sites that I use on a daily basis, there really is no comparison for someone who listens to electronic music.

The sad thing is that their only focus is on creators (subscribers). Customers who only listen to music routinely get the shaft via shoddy quality assurance and lack of discovery features.

Playback, search, browse, and discovery in general routinely fail to load ("Something went wrong. Retry?"). Playing and finding music on their platform shouldn't be such a buggy experience given how long they've been around.

mercer• 12 years ago

I heard SoundCloud's codebase is quite a mess (on Rails 2, I think). Maybe they need to do some refactoring/updating...

nathancahill• 12 years ago

Interesting. I've been using a more performant/minimalist version of SoundCloud called SoundRad[1]. It lets you ditch the slow interface and just listen to music. Hopefully they'll spend some of the $60M on improving frontend performance.

[1] http://soundrad.com/

deletes2• 12 years ago

Their interface has some nice features, like stopping music in a different tab if you start playing in another. The gui is nice as well. Unfortunately it loads too slow, and just playing the music maxes out a cpu core and even a part of my gpu on my modern machine. For example playing video on youtube with hd and fullscreen, uses about a third of resources soundcloud uses.

deletes2• 12 years ago

My comments were completely regarding SoundCloud, which is Very slow.

Haven't yet tried soundrad, I will if get to use SoundCloud enough.

ulfw• 12 years ago

Awesome. Congrats to the wonderful SoundCloud team. Gut für Berlin!

sakopov• 12 years ago

For the first time in a very long time I can say that this valuation is very reasonable.

nodesocket• 12 years ago

Love SoundCloud, literally spend 8-10 hours a day on it. Such a gold mine for electronic dance music.

Freestyler_3• 12 years ago

I must say I am one of those listening only users. I like the like system and the stream it creates. Only downside is since they updated their website it doesn't seem to work smooth on opera anymore. I use the site a lot less after that, since I will have to boot up firefox.

I like how the music of today is becoming more eclectic, less taboos on what genre you can and cant mix. And I get new music from soundcloud, youtube searching/discovering was never my thing but on soundcloud its easier.

hyperlexic• 12 years ago

Cool site, but $700MM?

dyno12345• 12 years ago

Most of the engineering positions are in Germany apparently?

iusable• 12 years ago

Congratulations to Alex, Eric and the team!

Great software, solid team and a really useful service. In the current climate, this is surprisingly undervalued at $700mn.

One of those 'penalties' for being based out of the States, I guess.

SoundCloud Raises $60 Million at $700 Million Valuation

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