The Inside Story of SoundCloud’s Collapse


Ryan Mac, writing for BuzzFeed:

In a music era dominated by Spotify, SoundCloud has been, at the best of times, a startup in stagnation, and, at the worst of times, an organization in disarray. Once harboring aspirations to be the YouTube of sound, the Berlin-based company has struggled to remain viable, hamstrung by management missteps, an ineffective business strategy, and a stubborn music industry that would rather it had never existed.


With SoundCloud holding out for just under $2 billion, Twitter balked, sources said, put off by the heady price tag, music industry headaches, and the discrepancy between Soundcloud’s monthly visitors and its registered users. (Many people listened to SoundCloud’s content, but never registered with the site.)


SoundCloud’s quest to build a business and find legitimacy in the eyes of labels divided the company and alienated long-time users. Internally, workers noticed a distinct shift away from creators and toward listeners. Internal key metrics changed from “tracks posted” to “number of minutes listened.” Meanwhile, the company’s short staffed engineering team focused on developing products that could better track copyrighted content. When SoundCloud killed its record button, the move was interpreted by some as a sign the company was less focused on creators. Soon it would stop supporting groups, a feature that allowed like-minded users to congregate on the site and share or comment on the tracks posted to it.