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EDM.com Spotlight

In the End, Soundcloud Will Dominate Spotify

A recent editorial on TechCrunch predicts that ultimately Soundcloud will be more powerful, and worth more than Spotify.

The premise of the editorial, by Alex Moazed, is that Soundcloud's large user community, and emphasis on user generated content will eventually lead to it's dominance over other competitors. While in financial terms Spotify is currently a more valuable company, Moazed argues that ultimately Soundcloud will be far more valuable, and far more powerful.

He makes some compelling arguments, particularly by comparing Soundcloud to YouTube, and Spotify to Netflix. SoundCloud, like YouTube, has no barrier to entry - meaning that anyone who creates music or sound, can contribute their work - much like anyone who creates video can contribute to YouTube. Whereas Spotify only features the work of established artists, with some sort of record label backing - similar to how Netflix generally only features video content created by movie or TV studios. This automatically gives Soundcloud a much larger base of current and potential future content.

While some would argue that the limitations of Spotify make for a superior, more selective range of content compared to the free-for-all that is Soundcloud, YouTube has shown just how powerful a nearly endless supply of user generated content can become. And because Soundcloud has a highly effective social aspect, it creates an organic sort of content filtering, by way of follows and reposts, that supplements the built in content recommendation algorithm. While Spotify may be a more efficient and simpler method of consuming music, Soundcloud is a vastly more powerful tool for music discovery. And this socially driven, community model is more compelling for users, and far more attractive to creators.

"Fetty Wap started as a SoundCloud sensation before dominating the billboard charts. DJ titans Diplo and Skrillex each built their presence and notoriety by remixing already famous songs on SoundCloud and using their following as a jumping off point to produce original music. This also helps explain why SoundCloud has a much better relationship with its creatives than Spotify seems to."

The lower barrier to entry on Soundcloud opens it up for the newest, freshest trends in music, that haven't had time to rise to the level of major label attention. This will always ensure that Soundcloud stays relevant, and ahead of the curve - which makes it far more attractive to young people who's interests are always ahead of the trends that dominate the major label world. Soundcloud is the place to find unique, cutting edge music that can't be found anywhere else (other than, in some cases, YouTube).

"…finding new songs and podcasts is an important part of the listening experience. But on Spotify, most of the music is content you can find elsewhere. The majority of Spotify’s content comes from major record labels and is freely available on other streaming services, like Apple Music or Pandora. But if you want to find the latest hot tracks outside of the mainstream, you’ll only find them on SoundCloud."

Soundcloud has faced it's share of legal difficulties in dealing with copyright claims by large and powerful rights holders. But, the recent deal with Universal Music is another indication that these are simply growing pains, and that Soundcloud will eventually sort all such issues out - again, similar to how YouTube eventually sorted similar troubles out. And in the end, the endless supply of unique, new, user generated content on Soundcloud will be it's greatest strength.

"While the inventory on Spotify is finite and expensive, SoundCloud has the potential for YouTube-like hyper growth.

As long as the platform continues to attract talented new artists and content producers, its future is very bright. Spotify, on the other hand, may struggle to stay profitable. Like Netflix before it, Spotify faces a continual fight with rights owners over its streaming revenue. At the same time, other popular streaming services will provide constant competition."

Read Moazed's full editorial here:


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