SoundCloud has unveiled a cheaper streaming service for $4.99. The service takes the name SoundCloud Go from its predecessor while the $9.99 service is now called SoundCloud Go+. CEO, Alex Ljung said that the mid-tier service was being introduced to rake in more revenue. The music streaming service has had trouble converting its 175 million monthly active users into paying customers.
“By expanding our offering, we not only enhance the experience for listeners on the platform, but also unlock new revenue opportunities to further expand our creator-payout program,”
-Alex Ljung, CEO SoundCloud
The $4.99/month service gets rid of ads and gives full access to over 120 million tracks and it supports offline listening. Now all this is there in the Go+ package too but just turning off ads doesn’t warrant $9.99/month. Also, SoundCloud doesn’t have the same deal that Spotify or Apple Music has with commercial artists so for many it doesn’t seem worth the $9.99/month. SoundCloud was always a great space for independent artists and a place for people to broadcast themselves doing covers of famous songs and paying tribute to their favourite bands etc.
Competition In The Streaming Game
With Amazon Music Unlimited going for as little as $3.99/month for Echo/Dot/Tap users and as high as $9.99/month for non-Prime members, the playing field is slowly opening up for music streaming services that charge much less than the standard. For Prime Members, the service is available for $7.99 and there are 70 million of them in the US so that translates very well in terms of revenue. Head of the Research firm MIDiA, Mark Mulligan, said that in the near future, specific genre based streaming services could be available at $2.99 to $3.99.
The competition is not only for pricing but for overall content as well. Spotify and Apple Music are kings in terms of content and accessibility. Both seem to be trying to edge each other out. Spotify costs $9.99 if downloaded from the website and $12.99 if downloaded from the App Store so the former tried to advertise on its app which didn’t go well with Apple and they had quite a public fight about it.
The streaming service market isn’t profitable at all. Even Spotify, which most would argue is king, doesn’t turn a profit. For giants like Apple and Amazon, it’s a small drop in the bucket that can be justified to lure customers in but for SoundCloud and co. it could literally make or break their business.