There are two differing stories about Soundcloud currently percolating in the media. They are:
The rise of “Soundcloud rap,” which, as reported on most prominently by Jon Caramanica of the New York Times, is currently the driving creative force of the rap underground. Soundcloud, which recently laid off hundreds of employees, may go out of business imminently due to lack of money.
It’s hard to reconcile these two facts. On the one hand, the very term “Soundcloud rap” is a complete anomaly in the history of rap music, which has traditionally been diced up into sub-genres based on things like regions (West Coast, Southern), cities (Houston, Atlanta), places (trap), sounds (boom bap, mumble), feelings (hyphy, crunk), and accessories (backpacks, shiny suits). But there has never been a meaningful sub-genre of rap named after the platform on which said rap is distributed. The phrase “mixtape rapper” has been used at times, but there was never rap named after mixtape websites— no “Datpiff rap” or “LiveMixtapes rap.” There was no Best Buy rap or Sam Goody rap.
In having its name attached to the coolest and most hyped rap music in America, Soundcloud has achieved something very elusive. In theory, this should also be very valuable, from both direct business—people going to Soundcloud to listen to Soundcloud rap—and in the sort of brand recognition and free advertisement that many companies would die for. Alas, it evidently hasn’t been: A leaked recording of a recent Soundcloud meeting indicates the company may fold in as soon as 50 days.
As Brian Feldman of New York Magazine writes, Soundcloud never quite found a business model that worked. It tried introducing ads and subscription tiers, but its appeal was always in the freedom it offered both uploaders and listeners. After the music industry effectively killed mp3 blogs and file sharing services, Soundcloud was one of the sites that emerged to fill a niche as the music internet’s Wild West—a place where people could upload demos, remixes, bootlegs, DJ sets, etc. Introducing barriers into this world in the form of intrusive audio ads and paywalls was intrinsically antithetical to Soundcloud’s appeal. Further, Soundcloud is primarily used by young people, who may have less disposable income to spend on things such as, say, a subscription to Soundcloud.
So why wasn’t a rap renaissance named after the company enough to save it? The problem with Soundcloud rap as it pertains to the health of Soundcloud as a business is simple. Once rappers who break on Soundcloud make their way into the mainstream, their music eventually gets funneled to the more popular streaming services, either because a label begins to officially release their music or because it’s the logical way to continue to grow one’s fanbase. In the process, Soundcloud rappers begin to be detached from the site which helped break them, becoming just plain ‘ol rappers. The way this manifests can be seen very clearly in the publicly available streaming data on various streaming sites.
For instance, Lil Uzi Vert and Soundcloud had such a strong symbiotic relationship that the company sent him a trophy last year for being the most followed artist on its site. This year, Uzi Vert scored the biggest hit of his career with “XO Tour Llif3,” which premiered on Soundcloud and was so immediately popular that his label quickly made it an official single. The song has been on the Billboard Hot 100 for over three months, peaking at No. 7—quite easily his most popular solo single, even making the long trek to being an omnipresent radio hit.
The success of “XO Tour Llif3″—from Soundcloud to shopping malls—should be a feather in the site’s cap, but the numbers tell a different story. On Soundcloud, the song has, of this writing, been streamed 109 million times, which feels like a staggering number until you see that it’s been streamed 257 million times on Spotify and 218 million times on YouTube, despite being on those services for less time. In the last week, “XO Tour Llif3″ has been streamed 1.7 million times on Soundcloud and 9.54 million times on Spotify. Soundcloud broke the song, but as its popularity increased, the spoils began to go to the streaming services higher up the food chain.
XXXTentacion is perhaps the preeminent Soundcloud success story, and though he so far has stayed independent by signing only a distribution deal for his music, his streaming numbers tell a similar tale as Lil Uzi Vert’s. “Look At Me!,” X’s breakthrough hit, has been streamed 86 million times on Soundcloud and 103 million times on Spotify. The most popular song on Soundcloud this week, “Molly” by the Florida rapper Lil Pump, has been streamed two million times in the last seven days and nine million times on the service in total; on Spotify, so far, it’s only been streamed about 900,000 times. But Lil Pump’s biggest hit, “Flex Like Ouu,” has been streamed 18.3 million times on Soundcloud and 20 million times on Spotify—eventually, “Molly,” too, will have more total streams on Spotify. There is a ceiling on the benefits Soundcloud derives for being the clearinghouse of new, popular rap music.
Soundcloud provided a valuable service to musicians and listeners, and something similar will invariably pop up in its wake. Like other long gone treasure troves from Napster and Kazaa to Hype Machine and Oink, it has been killed by the music industry’s highly successful consolidation of itself. Labels—from major to indie—have made it so that consumers can reasonably only listen to music online in very few places, and Soundcloud, generally speaking, was not one of those places. It also is, contrary to the motive of basically every business, a special sort of contrary tale: A company with a user base of passionate millennials that couldn’t be saved by it, anyway.