Forget the usual suspects: venture capital firm BITKRAFT is easily one of the most interesting funds to watch in the entertainment space. Since the start of June, they have participated in 5 funding rounds totalling over $44 million into companies pioneering possible futures for digital media.
With music mostly detached from its “real world” context of live gigs, it has become obvious that music’s virtual context of livestreams, virtual events, and online communities is set to shape tastes, genres and experiences. Professionals from across the industry, from labels to studios to artists, are increasingly involved in virtual aspects of our culture. Two recent examples:
So what do BITKRAFT’s recent investees enable? A look at 3.
Koji
Co-founded by Dmitry Shapiro, who previously founded Veoh and served as CTO of MySpace Music, Koji is a tool that makes it easy to remix posts for social media.
The posts are shareable and interactive, allowing people to remix them using content from various platforms, so Koji sees them more like “mini-apps“:
“If you’ve experienced WeChat Mini Programs, Kojis are the cross-platform, standards-based, modern versions of that.”
What appears to be the strategy, is for other platforms to allow these interactive forms of media inside of them, similar to how most social media platforms now have Giphy integrations to bring GIFs from the Giphy platform into your favourite social network.
So that sets it apart from other remix platforms, like TikTok or audiovisual mashup platform Coub which emphasise the on-platform experience. Unlike TikTok, Coub is not a walled garden, but most of the activity related to the platform seems to be happening in the garden regardless.
What does it mean for music?
Remix culture has gone through multiple iterations and isn’t done yet. Since the start of the digital era, we’ve seen these important steps for music’s remix culture:
Anyone with a computer being able to acquire (through piracy or a purchase) music production software at reasonable costs and distributing their creations through networks and filesharing apps. For example the rapper Benefit becoming an internet underground legend with a $5 mic and a $12 sound card.
As time went on, the above development spawned mash-up culture which moved from filesharing platforms over to the blogosphere.
SoundCloud emerged and made it even easier to follow and exchange with other producers around the world, spawning remix-heavy genre subcultures like Moombahton, ‘EDM Trap’, and ‘Cloudrap’.
Anyone with a mobile phone being able to produce, mix or remix media.
‘Remix’ becoming a default interaction through the dynamics of Snapchat, Instagram Stories, Musically and TikTok as people use face filters, music, and various imagery as overlays to interact with friends and connect to new people.
Koji’s bet seems to be that there’s room for remixable media inside these platforms – think embedding a TikTok post (content) into an Instagram Story (context), but then being able to change elements of the content independently from context.
Short version: we’ll see remixable content appear in countless contexts and will be able to move that content from one context (e.g. Fortnite) to another (e.g. Instagram Stories) without having it attached to the context (e.g. a screenshot of something (content) inside Fortnite (context)).
This will allow for an integrated web where you can interact with media from very day-to-day layers (like photo-based social media) to layers further removed from the physical world (like virtual reality). Like that time Zuckerberg demoed Oculus VR and Priscilla Chan (in ‘the real world’) called him while he was plugged into VR (see the Mixed reality section).
Sticking to the theme of layers: Voicemod allows people to adjust their voice digitally in real-time. In a virtual environment, you can design your avatar however you wish, but unless you’re great at voice acting your voice will sound kind of ‘normal’.
In more every day terms: we’ve all seen Instagram and Snapchat filters that add dog features to friends’ faces — Voicemod makes the voice equivalent of that.
While their technology seems targeted towards demographics in immersive, fully virtual environments like online games or VR-environments, they also cater to YouTubers.
One of the things they’ll do with their investment is double down on mobile, for which they’ve already teamed up with T-Pain who’s well-known for his use of auto-tune.
What does it mean for music?
The first aspect to point out is that voice modification has become increasingly easy and cheap to achieve, even in real-time. The second aspect is that BITKRAFT and Voicemod see a future with a high adoption of voice modification and the avatarisation of voice.
We already have virtual pop stars, so the boundary between virtual and ‘real’ is blurring, especially now that we can simulate elements that up until now were artefacts of “the real world” like our voice. Whereas today’s virtual pop stars didn’t emerge from the virtual landscape, future music personalities could come from this landscape, including their pre-programmed voices. Consider an influencer who’s mostly known for their in-game personality; now what if that influencer becomes popular for their music?
It’s the next generation of digital native.
Playable Worlds
The first thing you need to know about this startup is that it’s founded by Raph Koster, who was the lead designer for Ultima Online (UO). UO was an incredibly influential MMORPG: massively multiplayer online roleplaying game. It was released in 1997 – years before Runescape and World of Warfcraft. And people arestill playing it today, lauding its open world of worlds where gameplay is as much player-made as it is scripted.
The next thing you need to know is that Playable Worlds intend to accelerate the development of a concept called the metaverse. The metaverse is the idea of being able to plug into a virtual environment that connects all kinds of different virtual environments. Minecraft and Roblox are often mentioned as examples due to the ability for people to creatively craft various environments and objects. Fortnite also has characteristics of this, as beyond a gaming environment it now also contains an environment to hang out in and perhaps even enjoy a concert called Party Royale (pictured above).
Playable Worlds‘ first goal is to create a “cloud-native sandbox MMO” game, which sounds reminiscent of aforementioned Ultima Online. Sam Engelbardt, one of the company’s investors, says that“Koster’s vision and demonstrated ability to give players a compelling sandbox for the expression of their digital identities makes him exactly the sort of founder that he likes to back. Englebardt is backing companies that he believes will lay the foundation for the metaverse.”
What does it mean for music?
While Koji and Voicemod are tools that help people immerse inside and across “the metaverse”, Playable Worlds’ team is building out the technology to enable such a metaverse and then building a game with that technology.
Soon, our assumed digital identities will be as important as our given day-to-day identity – which is something that has actually already occurred for many people in the earlier days of the internet with its internet forums, chatrooms, and networks, before using your real name and identity were the status quo.
With that emerging landscape come new types of fan culture and many new possibilities to connect with people who may have a variety of identities across virtual environments. If that sounds niche: that’s how it starts. Ultima Online provided a stepping stone towards the landscape of Twitch, Fortnite, and other virtual experiences which the music industry is committing itself to now, 20 years later.
This is a rough transcript of my talk at Most Wanted: Music Dial-in on July 20.
Just before the pandemic hit, I started a new project called Hard Dance Berlin.
My intention was to map out the local scenes of harder electronic music and try to bring them together more after I noticed that people like each other’s music, but rarely come together.
I wanted to shine a light on all the local events happening that cater to people who love those sounds and in many weeks found events on 4 of the nights. One week in February even had relevant events all 7 nights. Berlin 💁
But then it stopped. Abruptly. First the cancellations came from concerned organisers and then the lockdown happened and forced organisers who hadn’t caught up yet to also cancel their events.
My vision had been this:
Focusing on local allows people from various scenes to collaborate and create new scenes. By bringing audiences together, we’d be able to support each other. No more having to easyJet around Europe every weekend just to pay the bills as a DJ.
But in the middle of March there was no local to focus on. Everyone’s ‘local’ was reduced to staying at home. While everyone’s at home, focusing on local seems pointless, because what would once emerge as a local subculture from a record shop and venue in a particular city, now emerges through networks of artists on SoundCloud and Instagram.
Organisers and artists scrambled to get livestreams up and running, while the amount of daily new information added an edge of overload to a time of uncertainty.
Something happened since the initial lockdowns:
We went from something that was very hard to grasp and felt completely overwhelming to a certain calm. We know most countries have similar style lockdowns in place. While uncertainty and hardship is part of the daily reality for many of us, things have also become a lot more predictable than back in March and April.
Unfortunately, that is temporary.
We’re now seeing governments inside the EU giving negative travel advice to their citizens traveling to certain countries or regions in Europe.
So while we’re now carefully trying to get live music back on its feet, with proper safety measures in place, we’re seeing a landscape evolve that is as complicated as it was in early March when some cities and regions locked down, but countries were still open… but would they be by the time you had to be there?
Risk management
In order to maintain or increase certainty and predictability, we are seeing organisers of drive-in shows, the rare socially distanced event, and even many livestreams depend on local cultures: venues, crews, artists.
Now let’s imagine a few months forward: we’ll likely see a complicated landscape of lockdowns as countries, states, and cities deal with outbreaks. When all’s clear, events with proper hygiene may be permitted, but when an outbreak occurs the area might go into a form of lockdown at almost no notice.
So let’s imagine next summer. Let’s say that we have a vaccine by then – which is optimistic, but not unrealistic. Will that vaccine give long-term immunity or be more like a flu shot? Can we get it out to large enough parts of our populations – how quickly? And what about all the other places in the world? And then what does the world look like? We’ll know that this can happen again – as it nearly did with bird flu, swine flu, SARS, MERS, you name it.
And what about other crises? Every year we see record temperatures and more extreme weather events. Governments are discussing “green new deals” to reorganise their economies in order to address the crises of climate, waste, and biodiversity.
The new normal is not a static thing: it’s a future of new normals.
So that current local focus we’re seeing: it’s here to stay. It’s risk mitigation. That’s not to say your favourite bands won’t be coming to town anymore: they probably will. But since focusing on local scenes is one of the most effective strategies for mitigating risk in the face of these crises, we’ll see a renaissance of local scenes in an interconnected world – where scenes from Berlin, New Orleans, Shanghai, etc. can be made visible to each other.
By what we’re learning now about building online business models, we can make sure music won’t depend as much on cheap air travel as it used to — because eventually there probably won’t be air travel as cheap as it is now.
So I’d like to encourage everyone to think long-term and build global networks for local impact. Our future kind of depends on it.
Virtual concerts are not here to replace live music. They’re here to provide a new type of entertainment. Personally, I find the average virtual concert dull and inconvenient. It’s dull because it’s usually not more stimulating than a conversation with a friend, playing a video game, reading a book, watching a show on Netflix, or in some cases even scrolling through my Instagram. It’s inconvenient, because I’m supposed to tune in at a specific moment, whereas all other in-home entertainment in my life is basically on-demand.
So, what is better than all those things? What can make people decide to stay at home, rather than catch some fresh summer air before we head into inevitable winter lockdowns?
Virtual music events have to offer things that other types of entertainment can’t. A virtual event has to leverage the context of music, rather than just transmit a performance to an audience. If it is to be sustainable for musicians beyond the pandemic, because they prefer not to travel as much or want to stay more closely connected with fans on a regular basis, it will also have to be in some ways better than the real life equivalent.
A vast number of livestreams are basically just a poor version of an actual live event. The only edge it has is that you can be lazy and stay on your couch (and it’s easier to social distance with a front door between you and the world). So where does a virtual event have an edge? What can you do online that you can’t do in real life?
This post is inspired by Kevin Kelly’s Better Than Free published in 2008. He describes generatives as follows: “a generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. […] In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold.”
Putting it into the context of the post, generatives are qualities or attributes that make people choose virtual events over “real life”.
8 generatives better than real life
Magical powers
Let’s start big: we would all love to have magical powers. Whether it’s flying around a (virtual) venue or invisibly teleporting on to the stage to see what the artists are doing. Through virtual live events you can let people do things they literally can’t do in real life – not because it’s illegal, but because of the constraints of our oft-lamented physical reality.
Figure out what makes sense for you as an artist, band, or organiser and then give your audience superpowers. That could be multi-camera setups that let fans jump around the room and zoom in on what you’re doing, virtual environments in which people can move by flying around, or a telekenetic airhorn that you’ve set up to respond to people’s tips on Twitch.
Interactivity
Recognize people’s contexts and attention span. Asking people to sit on their couch and quietly watch a music performance does not fit most types of music well. Most concerts are interactive: people dance, sing, jump, clap, cheer, drink, take photos, meet people, and perhaps jump into a mosh pit.
The home context is different: there’s mobile phone notifications that compete for attention, there’s messaging apps, there’s that untidy corner of the room you will definitely get around to cleaning up some time this week…
Keep this in mind. You can give people an escape from interactions by making events interactive – even if that just means responding to what’s happening in the chat.
Context synergy
Imagine loving a virtual environment like a video game so much that you spend the majority of your free time in it or even just a few hours a week. Now imagine an artist you’re a fan of coming to this digital space that’s like a virtual home to you. Are you going to go outside and do something else? Hell no.
One could argue that the context of Minecraft or Fortnite is part of ‘real life’ anno 2020. In that case: are you going to play on your usual server and miss that concert? Hell no.
Artist proximity
Fans can feel much closer to an artist from the safety of their home and a keyboard than they might in real life. Some people go up to artists to thank them, some don’t because they don’t want to bother them, and some are just absolutely terrified of the interaction. If there is any interaction, it’s usually a quick thank you and signature after a concert and that’s it.
Online, you can leave room for fans to really interact: you can talk about topics, show them what you’re working on, answer questions, and acknowledge the individual by mentioning their name or nickname on the stream.
Fan community or scene networking
Music brings people together. Before the web, listening to music by an artist you were into was the only way for some people to know that there were other people who feel or think just like them (especially young people). Now you can just Google those feelings and thoughts and go down an internet rabbit hole of communities, so while music has lost that monopoly it’s still a powerful force as a connector.
Although people are still connected to various degrees of their social lives (flatmates, family, close friends, colleagues) they are likely disconnected from further degrees such as acquaintances, people they’d run into at concerts, and other people they’d only meet when at events and social gatherings. Furthermore, while performers would see the scene they’re part of in many cities, many fans wouldn’t be exposed to their own scene in other places.
If this is an important aspect to your music, bringing these scenes and communities together online can create social meaning that’s better than a Zoom call with mom (sorry, moms).
Similarly, it’s great to feel closer to the rest of the world while being unable to travel. Many dance music streams will have Zoom sessions running which fans can join in order to broadcast themselves. You’ll see ravers sitting in their living rooms or at their desks, waving flags, drinking, or eating chicken (as seen on-stream during Dominator‘s virtual event). Occasionally, some of these webcams will be shown alongside the performers in the main stream, showing a global fan community from Canada to Brazil to Thailand to Italy (in the case of Dominator, that chicken-eating guy’s backdrop was a Mad Max-like stage with cars and motorbikes making jumps behind the DJ – unfortunately the “in-stream” is not visible on the recordings uploaded to YouTube).
If people have friends far away, they can experience that proximity together by tuning into the same stream. While there are ways to do watch Netflix together in a synced session, it’s not as special as coming together in an event that thousands of others are also using to come together.
An example of DJs “instreaming” a fan during Q-Dance’s Qonnect event in April.
A role to play for the viewer
This was already captured above, but I think the principle is so important that it’s worth making it explicit. Instead of broadcasting a stream and implying fans should just sit down and shut up, you can involve them.
Think instreaming by showing fans’ cams to the wider fan community, by improvising based on fan input, or by letting them interact with each other through magical powers. To put it in Ishkur’s words:
The premise may be awkward as a performer, but make the event about more than yourself. Let the people who attend participate. Make them part of ‘you’.
Personal example from back in March: with Hard Dance Berlin I created a line-up of performers and then used Plug.dj to let the crowd have a chance to go back to back with the DJs, so DJs would play half of their set time and the crowd was responsible for the other half of the tracks played during that time. The event was called DJs vs Berlin. Afterwards, we opened up the decks to the audience queue.
Another example is audience avatar customization as can be done in Fortnite, Minecraft, IMVU, Club Cooee (pictured at the top) and other virtual event spaces.
FOMO: Fear Of Missing Out
I never listened to Slayer much, but when they announced their last tour I got tickets to their show and started listening to their discography a lot. And the show itself? It was awesome. However, similar decisions motivated by FOMO-related impulses haven’t always panned out as well. Sometimes something was a waste of money or a night better spent asleep. Oh well.
My point: FOMO is powerful. It can make people prioritize things that normally wouldn’t be high on their list. Whether it’s a one-time only virtual event like the screening of Nick Cave’s Idiot Prayer, the release of limited edition merch during a stream, rotating line-ups like the Verzuz battles, or just having unique sets in your events as a result of improvisation and interaction: all of these create FOMO and make people want to tune in instead of going out.
Bonus: if your event doesn’t go as well as you hoped, but is not terrible either, cognitive dissonance will make sure that people’s anticipation translates into satisfaction. (But remember: trust and attention are fickle: do what you can to avoid disappointing people)
A nod to Kevin Kelly’s Better Than Free post, which inspired my own.The post has seen hundreds of comments since publication: if you think I missed something, please leave a comment below.
What SoundCloud can do to win back lost ground from its most important competitor: Instagram.
What is SoundCloud, actually?
Coming out of the MySpace era, SoundCloud was easy to define. Now, in a mobile world with streaming as the default way of music listening, that has changed.
I’ll go into why, as I explain why SoundCloud’s most important competitor is not Spotify, but Instagram. One started as music app, and the other as a photo app, but they’re both more: they’re children of the web 2.0 – the social web – and as such have become important platforms for communities.
If SoundCloud is to thrive, it will have to figure out how to make up for ground lost to Instagram.
“You mean I can comment on specific parts of each track instead of just leaving a comment on a profile?”
If you never had a MySpace profile, you won’t know how mindblowing SoundCloud was when it first arrived. The web was a different place.
Before Facebook, MySpace was the dominant global social medium. The global social web was different: most countries would have their own social landscape. Brazil, for a long time, was connected through Orkut. The Netherlands through Hyves and Cu2. Much of Asia was on Friendster. Yet MySpace was the dominant global player. It didn’t just have profiles, but it also had music. Bands could upload a couple of tracks to their profile (max. 4 or 5 at any time) and fans could feature artists’ tracks on their own profiles to show what music they liked. People would make long lists of bands and artists they were into and then would search, find, and befriend other people based on this. You weren’t necessarily friends with people you know in real life, or at least not exclusively, and it wasn’t common to use your real name.
It was a social network connected by music, and in the transition years between Facebook taking over from MySpace and music streaming really establishing itself, many people in music longed back for the MySpace days. They wondered what “the next MySpace” would be, even as recently as 2011 (I even wrote a piece about it).
SoundCloud filled an important role. It launched quietly and positioned itself as a collaboration tool for artists. It had this cool feature that would let you comment on the waveforms: something that most people hadn’t seen before. Furthermore, your account could hold an unlimited amount of tracks, throttled by an upload limit of 4 tracks per month for free accounts (they later changed it to a max. minutes per account model – which DJs hated).
MySpace would let people customize their profiles with code, so people figured out how to hack their profiles and swap out the MySpace default player for the SoundCloud player (this later became a supported feature, and you can click here to see a 10-year old guide on how it was done).
Due to SoundCloud’s visually distinctive music players, its spread through music communities was visible on MySpace. The fact that it went viral meant it would saturate scene by scene, as more musicians joined the platform.
How SoundCloud changed music
While MySpace was still the main presence for many musicians, communities started to form on SoundCloud. The musicians who’d spend a lot of time on SoundCloud were different: they’d behave more like what is now called a ‘digital native’. To be online a lot wasn’t necessarily normal for artists: remember, most people didn’t have smartphones yet and music listening was done from MP3-players.
Through SoundCloud’s features, there was now a platform specifically for music that was global, included all genres (though mostly electronic at the time – hiphop wasn’t really there yet), had great commenting features, a way to form groups around topics (similar to Last.fm), and a messaging feature.
All of this existed, but now it existed on one platform. And it changed the way people connected around music, the way scenes formed, and it changed music itself.
A recent example of how the digital music landscape has changed music is the so-called “playlist edit“, a streaming era version of the radio edit. The game to keep your tracks on large playlists is to make sure to keep your skip rate low. People skip stuff they don’t know – especially when they just start listening to a playlist, so long intros get skipped until people get to something familiar, or something that sounds familiar. The top of the playlist is where you get the most streams, so economically it makes sense to cut the intro down and jump right into the track.
A development that preceded that is that music started behaving like the image macro memes that were exploding at the time of SoundCloud’s rise (ask your older siblings about icanhascheezburger). While there is much talk about memes and music now, particularly in the context of TikTok’s impact on music, this development is something that has been going on for more than a decade and SoundCloud’s community was at the center of it.
In 2009 Dave Nada slowed down a house track at a party to match with the reggaeton being played there. It sounded amazing. He went home, made an edit, and uploaded it to SoundCloud. And that’s how moombahton was born, a genre now eclipsed by trap and subsequent developments in popular music, but it has provided the underpinnings for hits by people like Diplo, Justin Bieber, Ariana Grande, Skrillex, and many others.
After uploading it to SoundCloud, other producers heard Dave Nada’s remix, and started making their own moombahton edits. Soon they started making originals. Some of the people from this movement grew into ‘EDM’ stars, like Dillon Francis. And perhaps this had been happening before moombahton, but for me it was the first time that I noticed a genre being born within a matter of weeks, if not days.
Why the comparison with memes? Well, they behave similarly: due to music tools becoming more widely available (mostly through pirated music production software) it became easier for people to participate in music creation. Editing an image became easy with computers entering every household, and memes became a language of expression. The same conversation happened through music: someone would upload a musical idea and someone else would run with that idea and apply it to something else according to their vision. “Remix culture” was the phrase then, but now we use the ‘memes’ label for the vast majority of that phenomenon.
As moombahton was growing, electronic music producers started playing around with sounds of trap – a style of hiphop until then, that sounded very different from the Harlem Shake and Turn Down For What-style hits that were to follow.
Community was essential to SoundCloud and then they risked it all
For a long time, SoundCloud struggled with its business model, the licensing fees it had to pay rightsholders (and was getting sued for), and the fact that people were uploading music that wasn’t theirs to the platform.
How that all played out is a story for another time (or hey, right now, since it’s already been written about a lot, just head to your favourite search engine or try Ecosia which is like a greener Google). The result of how that story played out is that SoundCloud suddenly found itself manoeuvring into the typical streaming service domain of business models and service design. It struck deals with the majors, launched ads for the free part of the service, subscriptions for the listener side of the business (with a similar pricing model as Spotify & co), and added labels’ back catalogues to the service.
More music: cool right?
Well. Not really.
SoundCloud was the place for the freshest music. SoundCloud enabled new communities to emerge and connect, and those communities enabled SoundCloud to have the newest in music before it was available anywhere else.
Now, that all got merged into a context which included artists who were dead long before the internet. That’s not why anyone was on SoundCloud.
“Unlike Spotify and Deezer, whose free tiers have long been geared towards driving subscriptions, for Soundcloud this is not a funnel tweak, it is a pivot. It is a complete change in strategy.“
Driven by the expense of the operation, the company focused on selling itself as a catalogue service, essentially competing with Spotify — something it hadn’t really done before. As an on-demand catalogue service it was simply inferior to Spotify’s product that had been developed exactly for that purpose. For its own original purpose, SoundCloud’s product was still superior to Spotify’s product and to a large extent still is.
This part of the story ended up with layoffs and a change of management at SoundCloud. Its founders out. Painful.
It looked like SoundCloud wasn’t going to make it, but after debt funding and new investment, SoundCloud survived, now with a new CEO: Kerry Trainor, who previously led creator-centric video platform Vimeo.
Somehow, he convinced the company’s investors to let SoundCloud pursue a creator-centric strategy again, despite all the sunk cost into a different direction. And that brings us to today’s landscape.
SoundCloud’s most important competitor is Instagram
The defining thing about SoundCloud is not that you can listen to music there. You can listen to music on the radio. What has always defined SoundCloud is its community that pushes boundaries of genres and develops new styles (there’s even a hugely popular, chart-topping genre that carries the company’s name: SoundCloud rap).
SoundCloud is where it pops off, but the community doesn’t really connect there anymore.
Sure, people will leave a comment, maybe send a message, and do a repost, but that’s a very narrow spectrum of interaction among communities of creatives. Where do people share their work-in-progress music? Where do artists share their excitement about releases of other artists in their community? Where do people ask for feedback and create back-and-forths around creative expression? Instagram.
If people need to get in touch with each other, they DM each other through Instagram, too. It’s actually impossible to message people on SoundCloud from your mobile phone (go ahead, try it). More frustratingly, from your mobile device it’s also impossible to read messages people sent you.
Through posts being shared in Instagram stories, people discover new accounts to follow. When you visit a profile, you see which people are already following them — this helps to determine community-membership. Seeing who someone follows and is followed by exists on SoundCloud, but it’s just not as well-done as on Instagram.
Another aspect we often forget to discuss is that music culture is not just music. Music has a visual culture. With more of our time spent discovering and connecting to music online, even pre-corona, music’s context has become more visual than before. I’m not talking about music videos necessarily. I’m talking about shots from the studio, artists’ personal life, artwork, stuff artists are inspired by, videos of digital audio workstation screens, etc.
Music is a visual culture, which is one more reason why music culture & communities congregate on Instagram.
Is Instagram a music platform?
No.
You could make the argument that it is, but in defining Instagram as a SoundCloud competitor, I don’t think Instagram as a music platform is relevant.
The exciting thing for SoundCloud has always been its community. What made SoundCloud successful is that it made its community successful. And while SoundCloud is still the place where these communities post finished tracks and DJ sets, it is no longer the community’s center.
Instagram is the center of important parts of SoundCloud’s community and that is a problem for SoundCloud.
MySpace wasn’t a Facebook and it wasn’t a music platform necessarily: it was a bit of both and in being so it was the center of a community. As Facebook and SoundCloud built compelling new services that did the 2 things MySpace was doing well, communities started shifting and MySpace lost its center.
Now SoundCloud has lost its center. It is doing better than a few years ago, but there is a risk. What does this risk look like?
Let’s look at Bandcamp’s days where they drop their revenue share. The site sees record traffic and record sales on those days. Even for underground genres, where musicians’ fans are probably musicians themselves too, I doubt that SoundCloud is responsible for anything like the traffic Instagram is sending. And that’s fine, because SoundCloud is not necessarily a social media platform – it’s a music platform. The problem is, so is Bandcamp.
SoundCloud is in a good position. It’s part of online music’s infrastructure. As is Bandcamp, and I don’t think the two platforms are competing or are likely to make deliberate choices to end up competing. But SoundCloud doesn’t own its community, and it has a problem when its position as part of music’s default infrastructure is threatened (e.g. by a large streaming service that’s already integrated with Instagram deciding to compete with labels and adopting more creator-centric features).
How can SoundCloud win back its community?
I expect this is the question you may be asking or the question you expect to be answered, but I don’t think it’s the right question to ask. This is about SoundCloud’s place in a cultural landscape. Getting to a certain position in this landscape takes long and is unpredictable. Just consider that the start of SoundCloud’s story is as a tool for music sharing and collaboration. Did they think it would become a cornerstone of global rap and electronic music culture? They could have dreamt it, sure, but they wouldn’t have been able to map out the path by which they’d eventually achieve it.
Everything depends on early adopters
Some services adapt to user expectations by widening their demographic and appealing to a larger number of people (e.g. people that are not digital-savvy, are into music but are happy to just have a radio stream, etc.). In doing so, you often alienate early adopters who will start looking for the next thing. In 2017, SoundCloud was in trouble and Spotify was aggressively trying to increase its market share. I argued that we were witnessing a new “MySpace moment”: an end of one era and a beginning of a next one, as underserved early adopters start moving on and start populating new potential markets for entrepreneurs and investors.
Well, we’re there. It’s now. Accelerated by the global lockdowns in response to COVID-19.
A new landscape is emerging and in order for SoundCloud to retain its position as infrastructure for the early adopters of this generation, then it will have to integrate into that landscape. Just like it did when everyone swapped out their MySpace player for SoundCloud’s.
It will have to integrate not just with incumbents, but also upcoming startups in:
Music production software (software can mean mobile or desktop apps, as well as browser-based)
DJ software
Virtual environments like video games and VR experiences
Augmented reality experiences
The good news, if you’re cheering for SoundCloud like I am, is that they’re already doing these integrations. I can go to Plug.dj and play SoundCloud tracks for a room of my friends’ virtual avatars, as a DJ I can access SoundCloud’s catalogue from DJ software like Rekordbox, Serato, and Traktor with the Go+ subscription. They’re already integrated with the most popular augmented reality platform, which is Instagram with its filters and effects.
This is just survival strategy though: SoundCloud must stay close to early adopters so it doesn’t risk losing its place as essential infrastructure. The road back to being the community’s center is another question.
As long as SoundCloud can grow its revenues by sustaining itself as infrastructure, it may be a difficult business decision to invest in doing more than that. Doing more than that would take research. Definitions of audiences, so they can decide which ones to focus on and which ones to risk losing. It’s easy to shout what a company should do and make a compelling point for why they would be successful doing that. It’s much harder to execute it, and I speak from experience (on both sides).
A music streaming service as an ecosystem
My attempt to build a modularized music streaming service with low-priced subscriptions ran into all kinds of issues. You think a good funding round buys you time and we were well-funded at $20M, but money burns fast if you’re a streaming service. Ultimately, we needed to get high growth numbers according to industry benchmarks. Those benchmarks were established by other companies doing bundling deals with telcos. None of the local telcos we spoke to were into the concept of an ecosystem of music apps: they wanted a one-size-fits-all app like Spotify or Deezer. For a while we pursued 2 strategies at once: we built the standard app to try to get partnerships, while also working to construct the ecosystem.
Pursuing two strategies wasn’t intentional. It was the result of compromise. We now had two competing visions and efforts in the company, and even if they were mostly compatible, it was impossible to focus on both and be successful both ways. Not at that stage, not at that scale.
With time lost and money spent, I didn’t think the company could reasonably expect to be a large international player that could compete with the likes of Deezer and Spotify (the two major streaming subscription services outside of the US at the time). I didn’t say it publicly at the time, nor to the team, but I told the founders & CEO that I thought Zvooq’s best bet was to be a strong local player. An obstacle to entry and adoption for companies like Spotify and tech giants which inevitably would launch their own music streaming services (Apple was only just launching iTunes in Russia where we were based, and hadn’t acquired Beats Music yet, which became Apple Music). Personally I felt like that was the most likely route for investors to get a return: being acquired as part of a market entry strategy.
I had nothing to prove in building ‘yet another’ streaming service, and while I had fun figuring out how to serve a market where many people’s only personal computer is the cheapest Chinese Android phone money can buy, I decided to bow out. And that’s where the anecdote ends.
There’s a similarity though:
SoundCloud ended up pursuing two strategies too. It wanted to be Spotify and it wanted to be, err… SoundCloud. It ended up being neither and has now spent 2 years rebuilding.
If I were at SoundCloud, exploring how to get back to that center (for some reason), I’d be looking into the AI landscape. It’s going to accelerate things; faster iteration on musical ideas; MORE MEMES. If you thought getting production software onto everyone’s computers and phones changed music a lot (with SoundCloud at the center!), just wait until artificial intelligence-assisted creation really breaks through.
But I’m not at SoundCloud. And as we hit the 3000 word mark, it may seem I know a lot, but I know nothing. There are opportunities to research, but to say what they mean for SoundCloud requires insight into the company’s business, user research, behaviour on the platform, market analysis, etc.
But if I were to start researching this topic, with what I know now, I think SoundCloud’s best chance for moving back into the center is called AI.
Notes
When I say AI in this piece, I’m talking about AI-assisted music creation (or perhaps even AI-generated music). Music recommendation is another popular avenue for AI and something where machine learning has been more successful in attaining mass adoption and satisfaction by end users.
A small disclaimer on early adopters: the people that make up ‘early adopters’ change. The people who were early adopters in 2009 may not be part of that group now. Some of the people who would be part of that group now were 8 years old back then and probably not part of SoundCloud’s target audience. So when you hear this term used in narratives that span potentially multiple product lifecycles, don’t think of it as a static group of people.
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It has been a little bit quiet on here for the last weeks. I’m currently putting my free time into a daily update called MUSIC x CORONA.
It’s a digest that goes out every weekday morning (CET) and collects & organises the most important headlines for the music business. It covers the impact of the crisis, but also strategies for resilience and examples of what artists and businesses are doing in the context of the pandemic.
While you were on stage, millions of people were online playing video games or stuck in small towns without a scene for the music they love. Communities and online-only subcultures have emerged, and with that a template for how things work.
Here is some practical advice to get you started as you figure out How To Make Money Online™ over the next weeks:
Don’t replicate what you do offline. It does not work. You can’t do it. DJing for a sweaty club is different from playing music for people spread out over the world in their rooms. The goal is not to replicate the activity, but to recreate the emotions people feel when they go out.
Don’t just stream your stuff: interact. Last weekend hundreds, if not thousands, of musicians / DJs went online to stream a set to their fans. Over the next weekends, that number will rise. What are you doing to make your stream interesting when Netflix and YouTube are in the next tab, when there is a PlayStation in the same room, when Instagram is burning in people’s pockets screaming for their attention? If you’re doing something that you could do offline also, you’re doing it wrong. Interact with your audience.
You know all those people you’re in touch with that help you get gigs? Bookers, promoters, other bands and DJs, people in cities around the country or the world? You need to build an online version of that, pronto. After one or two livestreamed sets, your existing fans will get bored – you need to keep reaching new audiences. The internet is composed of loosely connected communities: PARTICIPATE. Watch other people’s streams, interact, comment on Soundcloud tracks, Instagram stories, share other people’s work.
When you connect to online subcultures, figure out how they work, what their rules and norms are. They have their own memes, sentiments, in-crowd jokes, personalities, and styles. Be aware and respectful. Hang back if you have to.
Repeat after Wacka Flock Flame on It G Ma: “It’s about us, never ’bout I”. Start supporting other people. Elevate them. People are into you because of your creative work: curate for your fans and help them understand what inspires that work. Always be giving more than you’re taking.
I understand people struggle with the new context in which they’re now having to place their art. See it like this: there are millions of people who spend many hours each week in these virtual contexts, be they Minecraft, Fortnite, a Facebook group, a Discord community, or a Twitch stream. You are bringing your art to people into a dimension where a significant portion of their life already takes place. That’s meaningful. Identify contexts and communities that excite you personally and find a way to express yourself in them.
We are in this for the long haul. If you are thinking “well, I’ll just ride this out and wait for things to get back to normal”, I have some bad news. It’s going to take months to get over the first peak of the coronavirus and its fallout. For things to come close to ‘normal’, it may take a year. But this is also a 9/11 moment: this is happening right now and it’s just the beginning, but the world will not be the same afterwards (there are a lot of reasons for it, but the simplest one is that many venues will be out of business and we’re entering a recession). Do not hold out, start investing your time into resilience, because whatever there was before this is not guaranteed to ever come back.
Start finding ways to generate Monthly Recurring Revenue (MRR). Streaming is part of that, but I have not met many (any? lol 😢) artists who can actually make a living from their streaming income. Start considering what you can create for your community of fans on a regular basis. Whether that’s doing playlists through currents.fm(like bod [包家巷]’s diary), connecting your community on Discord through Patreon memberships, exclusive livestreams with lessons on whatever you’re good at, start looking into these things now. Asking people for donations may work short term, but you will want to come up with a new strategy soon: start planning for monthly recurring revenue.
Many places in the world are still to hit and cross their virus peaks – in the weeks and months after that, life will get some semblance of normalcy to it again. You can start selling your time in those days. Sell vouchers for performances, try to get bookings without a fixed date and ask for a 50% deposit. Not everyone will be up for it (especially venues that will struggle to pay rent next month), but it may work for some. Just remember: if you sell future time, you get the money now, but you’ll still have to commit your time then. Make sure you’ll be able to make enough money in those months. We all want to think about when we can go outside again: help people paint pictures of that dream by selling them something in that future.
