Most of the music services available today have more or less the same music, so they distinguish themselves with third-party apps, free versions, improved designs, mixtape-style playlists, and other attractive features. On-demand music services have the same music (more or less) because the same copyright holders decide which songs to put on subscription services, and they typically put certain songs on all of them, or none.
SoundCloud comes from the other direction. Originally envisioned as a method for music industry people to share tracks with each other (the lack of a good method for which they called "one of the web's broken things," the service has accumulated an astounding catalog of music, some of it (including rare, live, remixed, and DJ-ed) available nowhere else.
Following a recent cash infusion of $60 million, SoundCloud recently launched a new, more elaborate player interface. That's the same amount of money Beats Music had when it spun off from Beats Audio, and with which it secured licensing to include music from all of the major labels, which means SoundCloud now has enough money to license everything that's on Beats Music, Rdio, Rhapsody, Sony Music Unlimited, Spotify, Xbox Music, and the rest.
What would happen if SoundCloud manages to secure major and indie label music to play alongside the long-tail and rarer stuff for which it has become so well known, as SoundCloud is reportedly trying to do? Someone has tried something like that before, and it didn't end well.
Not many people probably remember Qtrax, but I do, because I got caught up in its weird non-launch six years ago. The idea with Qtrax (as it would be with a SoundCloud, sort of) was to present not only the 20 million or so officially released tracks, but also all the "gray area" music found on file sharing networks and the like — live versions, remixes, unreleased takes, rehearsal tapes, and whatever else. Qtrax told me they planned to remunerate the appropriate copyright holders for that stuff, even if it were never actually released.
SoundCloud's plan is different, because it already has the right to distribute a massive amount of rare or unique audio tracks not available on the other services. In the parlance of our times, here are "5 reasons" a subscription version SoundCloud could be pretty nice for music fans and copyright holders:
Most crucially, SoundCloud would be able to serve up all the music on the other services, right alongside all of the weird, rare, stuff that has found a home on SoundCloud. The same playlist or streaming radio station could include the latest chart-topper followed by the latest weird remix of that same song, as just one example of the sort of thing SoundCloud would be able to do that the others currently cannot.
If you've ever listened to music on SoundCloud, you know how great the commenting feature is. Unlike the other services, SoundCloud lets you comment at specific points in the song. When other people play that song, they see the comments as they're hearing the same part of that song. People really like it (especially commenting on dubstep drops). It would be nice to be able to listen to more music in that way.
Rdio and Spotify have APIs with which developers can make their own apps. So does SoundCloud, and hundreds of apps already use it. Many of those apps are for recording music — the idea is that people can create music in those apps, and then upload it directly to SoundCloud, the way popular video editing software lets you upload it directly to YouTube.
SoundCloud as a consumer-facing music service would encourage a proliferation of SoundCloud listening apps. So now, you'd have the same API handling lots of musicians' uploads, as well as listeners' streaming and downloads. Which brings us to…
Monetizing Independent Music
Recording artists would be able to insert their music into SoundCloud right alongside all the major label music, from within the apps many of them are already using to record. Depending on how much people listen to the more fringe stuff on SoundCloud more of the overall pool of subscription money would (easily) arguably go to independent musicians and producers than it does on the other services.
Then again, bands like The Strokes, Nine Inch Nails, Beyonce, and many more have already put their music on SoundCloud directly. So really, something like this could affect the fundamental structure of the music industry. SoundCloud's approach of expanding the catalog past the traditional labels and online distributors could extend to the other services — possibly even through SoundCloud's own API.
Electronica producers, DJs, and musicians have already made SoundCloud the most important destination for their music because it lets them throw their latest mixes up on the web and into apps in seconds and have it distributed instantly to all their followers. This behavior is perfectly suited to the creators of and fans of the fastest-rising genre of music.