https://www.youtube.com/watch?v=wTOlrN5-UGU
In October 2010, Caldwell spoke at Y Combinator’s Startup School event at Stanford University about the failures of imeem and of the challenges still facing the music industry. At the event, Caldwell delivered a cautionary message for entrepreneurs interested in music startups. Caldwell criticized major music labels for holding too much power, focusing mainly on the industry’s licensing deals for content. He said that the current state of the industry made success for startups bleak.
While some commentators praised Caldwell for his harsh but realistic insight on the digital music startup industry, many critics (notably David Hyman, CEO and founder of MOG) felt that the lessons learned from Caldwell’s experience with imeem did not accurately portray the industry as a whole.
I'd like this to be true, but in practice it seems like most people (me included) strongly prefer hearing songs they already know most of the time, enjoy songs more with repetition, at least up to a point, and are more than willing to learn to like almost anything with high enough production value.
Some people are music snobs as a hobby and most go on discovery quests from time to time, but it honestly seems like most people most of the time want music they don't have to think too much about or devote too much attention to. Indie-only channels can't really deliver that.
While iTunes and Google Play gave chart toppers the spotlight, SoundCloud turned amateurs into professionals. "Nobodies" could put their music on soundcloud and get them streamed millions of times, and that recognition could eventually get them a chance to sign on a dotted line
I agree with that statement - dedicating significant energy to finding new music is a fairly niche hobby.
However, I don't think easy-to-find necessarily equals label-owned music.
I often listen to music for hours at a time in the background while I'm working or relaxing at home. I'll aim for an artist or mood and then I'm happy to let 'related tracks' from artists I've never heard of play indefinitely. If there's a track I really like I'll look at who the artist is and make note. I listen to a ton of "indy" music this way. Mostly, I never know who the artist is. Sometimes I discover new artists. All of this is very low effort on my part.
In fact, it would be significantly more effort to listen to megastar pop music or classics. I'd have to find a way to play the tracks - YouTube most likely, which means a ton of poorly thought out ads, or else paying for the songs directly, which usually is just slow and annoying.
I'd wager the biggest hours of music listening are for background music - at work, in stores and restaurants, while studying, while lounging around the house. I'm sure some people always want to listen to the same ten albums on repeat every day, but I suspect most people are driven more by ambiance. Indy music will do that job just fine.
Of course people will always want to play nostalgic hits. But I suspect that's a smaller driver of music consumption by hour of attention (or at least partial attention) than many people assume. That means the labels have way less power than people assume.
https://en.wikipedia.org/wiki/UMG_Recordings,_Inc._v._MP3.co....
Given that most sales are downloads or streams now, the only thing big labels can bring to the table is a nuclear level of publicity. And by definition, that's going to be reserved for a tiny handful of multimillion-selling household names.
Today's smaller bands and artists - which will be the majority - get no particular benefit from signing to a big label.
They may get some smaller benefits from signing to a smaller niche label, but they certainly won't get a big pile of cash from that.
The situation is similar to book publishing, where a tiny handful of massively popular signed authors get most of the publicity and the cash, but there's a solid underclass of midlist writers who do better with self-publishing, because they earn more from direct sales and - ironically - have a more secure career too.
There was a massive opportunity for SoundCloud to become Amazon/Kindle for Musicians.
MySpace had that space for a while but lost it. BandCamp is close, but doesn't quite make it because the default artist pages suck, and it sees itself as a store, not so much as a marketing and PR outlet that also happens to sell downloads and physical media.
SoundCloud could have won that space, but apparently SoundCloud's management never understood that there's more money in hosting associated services - web pages, mailshots, blogs, and so on - than there is in providing hosting for audio files.
In fact YouTube seems to be quietly taking over for basic track hosting, with the added benefit of video. There's no reaction feature on the tracks, but I'm not convinced that was ever an essential USP on SoundCloud.
But I still think someone else with VC backing could win this space and clean up.
Man, now I really want to build what SoundCloud should have been.
It's like sailing... Every bit of air that hits your sail will end up behind you, dispersed. That doesn't mean your boat will stop. You travel by charting a course where you stay ahead of a pressure differential.
Same in music. You need to find a source of new artists that will continually replenish you as you lose artists to platforms that focus on the stage after you in maturity. The beauty of culture is it always replenishes.
VC money is just something they needed because they couldn't do any monetisation without deals with the industry (too much of their content is non-fair-use derivatives of the big 3's copyrighted content) and they obviously can't stream millions of hours of music without some sort of money.
"In 2016, Spotify lost just over $600 million ($601.4 million), up significantly from 2015's losses of just under $258 million. This means losses increased by 133%."[2]
[1] http://www.swedishwire.com/jobs/680-record-labels-part-owner...
[2] https://www.forbes.com/sites/hughmcintyre/2017/06/15/spotify...
I think I love that phrase.
Which included $1bn in debt just last year: https://techcrunch.com/2016/03/29/stream-with-the-devil/
They wouldn't have raised that, if they were "just fine".
I really don‘t understand why Soundcloud tried to get into general, mainstream music streaming. Keeping their niche as paid host for DJs, radio shows, independent artists and small labels should have been their main focus. As a paid service for listeners (in contrast to artists) it simply can‘t compete with Spotify, Apple and others.
They'll bleed you to death with licensing fees, deputise you into their copyright enforcement police, upload their songs to your platform on one hand while suing you with the other, and all the while cry about how extracting monopoly profits is so much harder than in the old days.
Just go disrupt something safer, like organised crime or the international diamond trade. At least with those the law probably won't change out from under you.