Soundcloud may be known as the Youtube of audio but will it really enhance the core service of Twitter? With a huge number of music celebrities already using the site to communicate with their many followers, it does seem a sensible progression for the company to evolve into a music service.
SoundCloud is a free service that lets users, from individuals to DJ collectives to bands, upload and share audio files around the Web and according to Relode, Twitter were in talks with the Berlin-based startup to strike up a deal.
This would have been a huge move for Twitter and it’s investors, who are becoming concerned with the slow growth of the company. After going public last November at $26 a share, it quickly rose to $74.73 before beginning a long downward slide.
However, it’s now come to light that Twitter have said no to this new deal. Why? Well we’re not 100% sure, but we could hazard a guess.
Users
With over 250 million users and estimated value of $700 million, Soundcloud are certainly attractive to Twitter’s big guys, however a large number of the DJ community are abandoning ship and joining other services such as MixCloud, MixCrate and Play.fm.
To cover their back, Soundcloud use Audible Magic technology to flag up unlicensed songs. Soundcloud then issue a take-down notice. Unfortunately, errors often happen with this technology and users are ordered to take down their own music, resulting in some miffed off customers having to defend their own compositions meaning more and more are switching.
Revenue
Soundcloud isn’t particularly well set up for advertising in the same way similar streaming services are so its revenue is limited. Of course, there is the option to pay for higher tier service, complete with unlimited uploads & detailed statistics on who’s listening but we all like free and so the majority of users just stick to the free stuff.
Licensing
Possibly the biggest red flag. Soundcloud doesn’t have any licenses from music labels or publishers meaning for a smaller entity like Twitter, obtaining these licences could be hugely expensive and full of hassle.
So Twitter may need a way to kick up its stock price, but it would seem they’ve seen the light and would agree Soundcloud isn’t the way to go. Back to the drawing board for Twitter then.
Soundcloud may be known as the Youtube of audio but could it really enhance the core service of Twitter? With a huge number of music celebrities already using the site to communicate with their many followers, it does seem a sensible progression for the company to evolve into a music service.
