soundcloud: a success story
TRANSCRIPT
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Introduction
SOUNDCLOUD
Ryan Kam
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Introduction
October 2008 Launched by Alex Ljung and Eric Wahlforss
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Introduction
October 2008
April 2009 €2.5m Series A round led by Doughty Hanson Tech
Ventures
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Introduction
October 2008
April 2009
May 2010 1 million registered users
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Introduction
October 2008
April 2009
May 2010
June 2011 5 million registered users
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Introduction
October 2008
April 2009
May 2010
June 2011
January 2012 $50m round led by
Kleiner Perkins Caufield & Byers
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Introduction
October 2008
April 2009
May 2010
June 2011
January 2012
Today 40 million+ registered users
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0
5000
10000
15000
Soundcloud Pandora Spotify 8tracks Songza
SoundCloud leads all major internet streaming music services in global web traffic
Sources: www.alexa.com as of 08/19/2013
Alexa Global Traffic Rank (lower is better)
Introduction
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0
5000
10000
15000
Soundcloud Pandora Spotify 8tracks Songza
200m unique visitors per
month
Sources: www.alexa.com as of 08/19/2013
Alexa Global Traffic Rank (lower is better)
Launched a decade
earlier
Introduction
Declining
“Curated” music: not quite there but rising fast
“Curated” music: not quite there but rising fast
SoundCloud leads all major internet streaming music services in global web traffic
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Why has SoundCloud been so successful?
Introduction
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Or, rephrased:
What makes SoundCloud different from the
competition?
Introduction
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Or, rephrased:
What makes SoundCloud different from the
competition?
Introduction
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Three things.
Analysis
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Analysis
Popularity of electronic dance music
Better features and fewer restrictions
Unprecedented global reach
Leading share of internet
streaming music
market
+
Strong growth
prospects
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Analysis
Popularity of electronic dance music
Better features and fewer restrictions
Unprecedented global reach
Leading share of internet
streaming music
market
+
Strong growth
prospects
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Electronic dance music, often abbreviated to EDM, is electronic music that is produced primarily for the purposes of use within a nightclub setting, or in an environment that is centred upon dance-based entertainment.
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Analysis
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Analysis
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DJ Mag’s Top 100 DJs that have an active SoundCloud account
*As of 08/19/2013
Analysis
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DJ Mag’s Top 100 DJs that have an active SoundCloud account
*As of 08/19/2013
Analysis
SoundCloud is the preferred channel for DJs and producers to connect with fans
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Analysis
Popularity of electronic dance music
Better features and fewer restrictions
Unprecedented global reach
Leading share of internet
streaming music
market
+
Strong growth
prospects
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A polished interface allow for enhanced shareability, greater customization, and a superior listening experience overall
Follow artists directly or users with
similar tastes
Tagging enables easy “discovery” of similar content
Tagging enables easy “discovery” of similar content
Follow artists directly or users with
similar tastes Continuous stream of targeted user-
generated content
Analysis
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Ads
Save and revisit single
tracks
SoundCloud also has far fewer restrictions on how its users can create and consume content
Restrictions
Skips
FF/Rewind
Who can upload music
SoundCloud Spotify 8tracks Pandora
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Other nuisances
No Yes Yes Yes
None Yes – pay to remove
Yes – pay to remove
Yes – pay to remove
Listening limits
None Yes – pay to remove
Yes – pay to remove
Yes – pay to remove
Analysis
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Analysis
Popularity of electronic dance music
Better features and fewer restrictions
Unprecedented global reach
Leading share of internet
streaming music
market
+
Strong growth
prospects
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SoundCloud is available anywhere you can connect to the internet
Pandora Spotify SoundCloud
Analysis
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Pandora Spotify SoundCloud
SoundCloud is available anywhere you can connect to the internet
Analysis
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Pandora Spotify SoundCloud
SoundCloud is available anywhere you can connect to the internet
Analysis
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40
40
20 100
0
20
40
60
80
100
120
EDM Features Reach Total
SoundCloud’s advantage stems primarily from its superior features and usability, and the current popularity of EDM Contribution to total competitive advantage, %
*Estimated
Competitive advantage generated by listeners…
• Looking for new releases posted first on SoundCloud
• Frustrated by paywalls and instrusive restrictions
• Seeking to diversify their tastes in music beyond Top 40
Conclusion