The tech-blog world is blowing up with reports that social-media giant Twitter is in talks to acquire SoundCloud. We’re not sure how founded the rumor actually is, but such an acquisition could have serious implications (positive and negative) for producers and DJs around the world. We take a closer look at how Twitter might affect day-to-day SoundCloud users in this article—come speculate with us.
CUT FROM THE SAME CLOTH
The rumors around the internet are all brief and free of details—but most sites are focusing on the implication of the deal for Twitter. 250 million active users on SoundCloud (recently valued at $800 million) suddenly becoming a part of the Twitterverse seems to many tech commentators like a user play, similar to Facebook’s recent WhatsApp purchase.
Twitter and SoundCloud make for a pretty reasonable team, since they’re already very similar companies in many respects:
Twitter is well known as a micro-blogging platform that took short, public communication out of Livejournal, Blogger, and others and into a format designed for brevity and immediacy. Anyone could very rapidly publish content on Twitter and potentially get read by any number of people around the world.
SoundCloud has created an active community of 250 million users that thrive on fresh musical, track-based content from artists. It similarly emerged from the very blog-heavy music curation world prevalent in the late 2000s (remember bloghouse?), and made track sharing something that artists could rapidly engage in. As with Twitter, any artist could very rapidly publish a track and get heard by any number of people around the world.
SO WHAT HAPPENS WHEN THEY MERGE?
We continue to experiment with new ways to bring you great content based on the music activity we see every day on Twitter.
— Twitter Music (@TwitterMusic) March 21, 2014
The deal is still under discussion, but it’s never too early to speculate on what might change. We won’t focus too much on Twitter—since we’re pretty sure more DJTT users use SoundCloud more regularly than Twitter. Here’s four ways that we imagine users might see a difference when/if #twoundcloud makes its debut:
#1: A BIGGER ACTIVE AUDIENCE
One of the first things to happen after an acquisition would likely be a merging of the two user bases. Twitter users (255 million active every month) will quickly be able to comment, share, and like content on SoundCloud.
One of the biggest obstacles for engagement on any platform is registration, but if Twitter users are already signed in, hitting the Like button on a track makes it that much more likely.
We suspect that followership would merge as well—so if you follow an artist on SoundCloud, they’d show up in your Twitter feed, or if one of your Twitter friends puts out an EP, that would also appear. Remember: Facebook has been slowly failing music artists who don’t want to pay for content visibility, so there’s real potential to take up some slack in this department.
#2: INTEGRATED MEDIA; QUICKER + EASIER SHARING
Remember how Instagram photos used to show up directly in Twitter feeds? It vanished when Facebook snatched up Instagram, and now only certain media providers have in-feed viewability. The image above shows what Soundcloud links look like in Twitter’s feed by default—not exactly the most enticing way to present an audio file. Odds are very good that if a merger happens, Twitter feeds will prioritize engagement on SoundCloud content, likely right from the feed (you can click in to a tweet with a SoundCloud link and see an embedded player, but that’s one more click before actual content).
#3: ADVERTISING AND PROMOTION
Let’s talk about money for a moment. Twitter makes money from Promoted Tweets, which allow companies to spend cash to get their tweets in front of users who might engage or suggest the business/brand to likely followers. Expect the same behavior to appear on SoundCloud, and cross-pollination of “Promoted Tracks” in Twitter feeds as well.
We’ll see how this plays out, and it’s likely a sticking point for some at SoundCloud, which has never had real advertising incorporated into it, instead making money from Pro accounts with more audio storage. The track-sharing platform has only come close in the last year, with Pro Partner accounts getting the ability to add banner graphics to tracks to make them stand out in the homepage stream.
#4: TRENDING MUSIC, ARTISTS, AND LOCALIZATION
If you’ve been paying close attention to Twitter, you might know that they already made an attempted foray into the music scene with Twitter Music, a now-scrapped internal project that hoped to tie together music discovery and Tweets. With the purchase of SoundCloud, Twitter would be well suited to try again, instead focusing on what music that’s on SoundCloud is trending and popular.
Twitter already has some of the most interesting trending information for topics being discussed worldwide and in individual countries with Trending Topics, and doing the same with SoundCloud content would give them ample data to become a major music-discovery platform. We could easily see this engine becoming as powerful as Hype Machine.
Twitter does localization really, really well, encouraging users in all different countries to join and use their platform. If its use in various protests and revolutions wasn’t evidence enough, just look at their top five global markets by reach (from 2010):
If they can similarly provide a great experience and platform-adoption rate to countries that don’t have a massive cultural reach, it would mean that there could be some amazing new music discoveries. Imagine seeing tracks that are trending for, say, Indonesian SoundCloud users. We would expect a lot more left-of-center tracks, artists, and genres to get attention.
#5 AND BEYOND: YOU TELL US
There’s no doubt that a merger of the two services would be dramatic. What would you want to see if the two joined forces? How do you imagine SoundCloud would improve or worsen under Twitter’s umbrella? Let us know your thoughts in the comments below.
Read Next: How To Win At SoundCloud
I think if they can similarly provide a great experience and platform adoption rate of the countries that dont have a massive cultural reach,it would mean that there could be some more new and amazing music discoveries.If they will merged both i think many followers like Soundcloud than twitter.
Maybe the merger would make SoundCloud more social? But yet again it does seem social enough…
streaming radio+soundcloud+twitter = spintech.dj
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From a Business of the Internet perspective, Twitter and Soundcloud have been largely fueled by Union Square Ventures out of NYC. Ironically so is Disqus. These guys tend to invest in focused, community based solutions to platform level problems. They also tend to have a hands off culture.
This may mean that the reason they vested in the first place was because the cultures of Twitter and Soundcloud closely matched their visions to begin with. That said, Twitter and Soundcloud may be much closer already than we see as users.
USV is small, so if you really wan to weigh in, I bet if you hit their blog, particularly Fred Wilson “AVC” you may get some good info and also make an influence on what happens if something does.
While Fred Wilson and the USV crew probably have some insight into this
possible merger due to the required reporting that Soundcloud is
committed to provide on a regular basis to all investors (i.e. they
would have to report to their investor if they were approached with a
credible acquisition offer), the USV investments in these 2 companies
were relatively small and quite some time ago (Soundcloud in 2011,
Twitter in 2007, 2008 and 2009). USV is highly unlikely to have a board
seat at either company, or any real influence as to Twitter’s decision
making process (Twitter buying Soundcloud only happens if Twitter’s
board of directors backs the CEO and management team on an acquisition).
With Soundcloud, USV probably was the bulk of their $10MM Series B raise,
but they have since raised an additional $110MM in 2 subsequent
investment rounds. As such, they are probably now holding 3-5%
ownership in the company (at most)(that $10MM probably bought a 20%
share at that time, shared equitably by all investors in the round, but
with the subsequent fund raises that the company has done, and USV
either not having or not exercising their pro rata rights, means that
the later raises required significant dilution of earlier equity
stakeholders). They have raised a total of $123MM. An acquisition of
SC is probably a realistic expectation for a liquidity event for this
investment, but if their $800MM valuation with 250MM users (and Kleiner
Perkins being the lead in their Series C round) is an indication that
investors expect a higher valuation in an acquisition, or for the
company to push for an IPO in a few years. Soundcloud has a great
revenue model, essentially being a recurring revenue membership service,
dependent on keeping users engaged. That could push their valuation up
significantly, as most SaaS companies are currently valued at a 10X-20X
multiple on revenues. As they are a private company, though, there is
no easy way to know for sure what those revenue numbers look like (the numbers reported in the tech media are often inflated).
With Twitter, USV was probably not the lead investor in any of the 3 rounds
that they participated in. The 3 early rounds total $55MM, but since
that time, Twitter had 5 additional investment rounds prior to going
public (with a total amount invested over 8 fundraising rounds of
roughly $1.20BN; Kleiner Perkins was notably the sole investor of a
$200MM Series F raise). USV probably had a 0.5-0.75% ownership share in
that company at the time of Twitter’s IPO. As Twitter has been
publicly traded for about a year, USV has probably sold their shares of
stock in the company (a venture investment requires an exit; holding
shares of stock beyond the lockup period prevents them from collecting
the return on their investment, so is rarely, if ever, done). So USV
probably knows as much as anyone else in terms of what Twitter plans to
acquire (acquisition purchases are not reported in the quarterly reports
to the SEC until they have actually taken place). Fred may have some
knowledge from private conversations with Dick Costolo (Twitter CEO and a
co-investor in Twitter’s Series A fund raise; along with Marc Andreesen
[founding partner of Andreesen Horowitz, a hugely influential and
massive VC fund], Ron Conway [a super angel who was an early investor in
Google and Paypal] and Naval Ravikant [CEO and founder of Angel List, a
platform for angel investing]), but he couldn’t disclose that
information as it would violate SEC rules for insider trading.
All that being said, it is great to see Fred referenced on a DJ site. Not a lot of VC talk in these parts… (I work in the start up space,
running screening for an angel fund, coordinating investment raises for
companies, mentoring in 2 local accelerators). I’ve been a huge fan of
Fred’s for several years, and an avid follower of his blog. His
fireside chat with Pando’s Sarah Lacy was excellent, and he’s such a
humble yet scary smart guy. Union Square Ventures is a great investment
firm, with about $220MM in their current fund, and over $450MM under
management. If they are early investors in a company (they tend to
focus on Seed and Series A round investments), it is usually a good bet
that one of the bigger firms in the Bay area will invest in a later
Thanks for the numbers…my OP is a nod to USV style and the potential similarity of Twitter/SC cultures that may exist based on early USV involvement. If they merged, such a shared ideology may be more important to us outsiders and end users than the dollars and cents of why they merged. But numbers are cool too;)
I can see a definite plus side for artists & labels reaching out to put content directly into fans eyes & ears. And again for reaching out to new fans as well. The engagement capabilities with SC were quite limited, so I see potential growth in that aspect.
Almost every mix I post gets flagged and taken down. I pay record pools for this music. Most djs play other peoples music. How do other djs share their mixes on soundcloud?
Multiple news sources say that Twitter is NOT, I repeat, NOT acquiring SoundCloud. Yay! But then again, does it mean they are trying to sell? I’d rather have Google than Twitter at the helm. Ultimately, I’d like to see it remain independent.
we already see SPONSORED ads in out timelines and such on twitter. So i guess now we are going to get advertisements and SPAM BOT posts + porn posters in our soundcloud pages too? im sorry but if all that cant be cleaned up, this is going to look like a huge social (mess)dia site. Ill garuntee people are going to close their accounts and move to mixcloud
i really just wish soundcloud did have a way to give announcements to your followers and twitter just need to make soundcloud post’s look better.i do like the idia of if ppl r following the sc the auto follow the twiter n vice versa
Over on another forum somebody pointed out that Twitter could be (is most likely) eying SoundCloud as a platform to enable audio tweets. Basically ruin the platform as a music sharing tool. Instead of minutes long songs, up to XX seconds of recording. Thus there will be lots more activity, but most of it stupid and juvenile. Or, in a more scary tone of voice, SoundCloud is the next YouTube comments section. Boom!
I really hope this doesn’t happen. What I like about Soundcloud is that it is just about the music, none of the other stuff that comes with social media like Twitter (including the advertising). Granted there would be some advantages but I have a feeling Soundcloud would go downhill under Twitter’s influence.
I can see the pros of having more users which equals more exposure for up and coming artist but its going to get plagued with ads and BS. More cons than pros in my opinion.
Exactly. Just look at how Youtube went downhill after Google acquired it and merged it with Chrome. Youtube used to be a great platform for emerging artists but now its just a big bowl of BS. That’s full of bugs I might add.
twitter doesnt really have that many ads. and since youtube has been acquired by google its thrived with ppl how make content actually being able to make money
I’d still prefer no ads to some. Plus, although youtube fan base has grown, what Chaser and I are saying still applies – more cons than pros.
Personally – hope Soundcloud dont go down the ad revenue model.
Oh great I can barely handled the disappointment, more EDM…. Eek
oh no… i can barely handle the disappointment. another hip “pop” dj. the fact that you so frequently use the term “EDM” screams that you are ignorant to the genre of electronic music. as a tech house dj i dropped blackalicious, roots manuva, drs, alex pirez and a bunch of ram and metalheadz records in my set yesterday. most of us are fairly diverse and have good taste. so, if you are going to be a troll… find another bridge to spend your time under.
Who said I only spun hip hop? Is that an assumption because I am Black? Wouldn’t that make you bigoted to make such a blanket assumption without knowing more about me? I don’t care about Blackalicious, Roots Manuva or drs, these days I have had it with what is casually called “dance music” it’s geared towards those under 30 and I am over 40. I am playing old school these days and yes that means records pre-1990.
now you get it… the ignorance that appears when someone makes blanket assumptions. if you are going to sterotype people who play electronic music, you may get pigeon-holed too.
as to the hip “pop” dj label (not to me confused with hip hip), it may have emerged due to the time old trashing of techno dj’s by hip hop dj’s over the years (even more so with the new generation of hip pop dj’s or does a certain eminem song escape your memory?). thank you from continuing the sterotype. yes, some of us fall into your age group too. i was flippin’ nova mute and +8 vinyl back in the 90’s and catching Dr. No in the late 80’s.
by your logic; all electronic music is edm; eric b and rakim paid in full is of the same calibre as lil wayne or drake.
at least i have an open enough mind to realise that no matter what the genre, talent should be recognised and respected.
Yeah man, why so angry? Do you only have the emotional capacity to shit on everyone who doesn’t play hip hop and assume everyone plays ‘edm’? Sorry man, you need to brush up on your musical knowledge if you think edm is the only form of dance music out there.
How am I angry? How many YouTube videos of EDM DJ’s playing pretty much the same tracks with little variation? I play electronica (which is what it’s was called before) mostly Soulful House, Chicago House and commercial remixes when I believe it fits into a set. There was nothing angry about that one sentence. DJ Tools and Digital DJ are both dominated by EDM DJ’s, Key detection mixing (something I was doing WAY before such a thing was being discussed widely); I have been DJ’ing for 28 years and I never said anything negative about EDM only that people see Tiesto and Hilton making million of dollars and feel that’s what they need to specialize in. I also never said its the only form of “dance music” out there, that is an assumption on your part. I have spent time in Europe, House is king in Europe. House is also king in the US were the majority of the patrons are Caucasian. The majority of Wedding DJ’s are Caucasian, I have no problem with this. But I wouldn’t call Tech Tools diverse by any stretch, nor would I call turntablism Dj’ing, its an art form and should be seen as such but playing music with no lyrics does not count as being a DJ. I am pretty sure, I got you beat in musical knowledge which goes back deep into the 1970’s. Personally I have to be in the mood for Tech House, Trance, Dub Step and the ten thousand different versions of house or techno.
Well, I just assumed you were angry by claiming I, amongst others, were shitty laptop edm dj’s. Believe me man, we all hate EDM just as much as the next guy and throwing that word around is pretty offensive lol.
One thing I like about twitter (even though I’m not a member) is that there’s no censorship. Maybe this could rub off on Soundcloud’s recent ‘piracy’ rules.
One of Twitter’s internal mottos: “Defend and respect the user’s voice”
So you play EDM but don’t have Twitter? You likely have a Apple to DJ with and you don’t have Twitter? You’re W… never mind.
Yeah, I play techno and don’t have twitter. I just play as a hobby, I don’t need to promote myself. I’m a realist and I know djing isn’t a real career for 99% out there. Not only that, if I had twitter I’d spend all day on my laptop and get nothing done…I’m just controlling my ocd 😉 Oh, and no Apple, sorry. I use a pc lol
Hobbies are fine, do you, I don’t care what you play. Actually it could be a career if you just charged more for what you do.
My buddy made $1,500 last weekend playing for townies/normal people. He did 55 events last year including weddings, it’s a viable career choice. If you have OCD, get a residency and do a podcast on the side or broadcast with VDJ.
I am returning to mobiles after trying the “real job” route. I like to be antonymous, which is why I like courier work and driving big rigs previously.
I have Twitter on all three laptops, the HTPC and only the server (WHS 2011) doesn’t have it, its also on all four Android phones and I don’t look at it even more than a couple of times a day. I write for Motorsport.com, so I have to be in the loop. I also travel frequently overseas and my friends post on both social networks.
Hustlin man, good on ya. And I know the big rig life, I’m doing it now too.
same deal here. i im PC and been djing since 1999. All that time in clubs, production, radio, and as an EDM dj, and i still dont have a facebook account. (nor do i want one)
I have both, you two anti-social? I get the majority of my news from Facebook and Twitter. I have been DJ’ing since 1-9-8-6.
all that bothersome copyright compliance… who do they think they are!
Perhaps we can expect a Soundcloud that actually…works!
I’m curious – I hear this a bunch from our community – what do you consider to be “broken” about Soundcloud?
Sidebars often fail to load. Entire pages often fail to load. When uploading a lot of content (like we do at The EDM Network), uploading often fails. Many times a day, I see, “Something went wrong. Please try again,” with a Retry button under it.
grab the browser extension Ghostery and turn on blocking for Analytics. watch what happens when you browse soundcloud (hundreds of hundreds of requests to server get blocked). This drastically slows down the performance of browsing soundcloud as it’s constantly pinging data back to it’s servers every time you click a link inside the website. hundreds of times more than any other website i’ve come across.
I used to have Ghostery, but out of nowhere it started crashing on me all the time. I’ll try it again.
No tracklisting, no timestamping, slow streaming, uploads and pageloads failing, silly fees.
Well, it is meant to be a SOUNDcloud and not a MIXcloud…
True. But in a way they are competitors and those features don’t seem groundbreaking hard to add…
That’s right, but it is against soundclouds philosophy. They don’t want you to upload sets mixes because they include songs from other artists in most cases where you don’t have the rights. This is where Mixcloud shines, they are paying for every track that is played in a mix…
But there should be a way to upload the sets, then for every track on the set should have a link to the original artist and on this link, soundcloud could ask the original artist to approve or deny the content.
If the artist didn’t manifest in time, the set can continue to play as it is, if they deny, the part of the set that contains that track could be muted…
Also would be awesome a better integration with DAWs and DJ Software to upload the tracks directly to SC with the tracklist alredy listed.
So many things can be better…
Don’t get me wrong, I would love to have all my public and private music/sets/projects in one place. I just wanted to clarify what the reason behind soundcloud’s behavior is. I think they are not willing to pay for tracks as they were played…
Yeah, licensing for mixes is a whole other issue entirely. I’ve not had any problems with slow streaming on my end – I can jump around a track almost immediately after hitting play. The failing uploading and pageloading, however, is extraordinarily annoying.
I just wanted to say thank you for mentioning this, its something most of our users still don’t know. Mat (Mixcloud co-founder)
Soundcloud doesn’t work for you????????
And the mobile version is that much worse.