With 175 millions users and a valuation close to $1 billion, it was probably inevitable that SoundCloud would come under fire — "Public Enemy No. 1 for the labels," as Garrett Brown wrote in his e-book about the best way for DJs to use the music-distribution platform, Conquering the Cloud.
Indeed, figuring out who's using copyrighted music — and finding the money to pay royalties for it — has been dogging SoundCloud for years. "The record industry goes after one company, like Napster," intellectual property lawyer Michael Santucci told Buzzfeed Music. "They go after them to make the biggest impact." And last year, after Twitter backed out of a takeover because of fears the unresolved issue would keep SoundCloud from making money, investors and shareholders finally insisted something be done to remedy the situation.
Advancements in royalty management software have made SoundCloud able to uncover possible copyright violations in even the briefest samples — sometimes before an upload has even been completed. These aggressive and ruthlessly efficient robots have resulted in tracks disappearing daily, Brown told BuzzFeed Music, citing DJ M.O.S., Modern Machines, and Henrix as just a few examples.
Increasingly frustrated with SoundCloud, many DJs are beginning to take a second look at a well-respected but comparatively tiny alternative: Mixcloud.
"I've had some pretty passionate debates around Mixcloud versus SoundCloud with many DJs in the past," says Casey Meehan, whose chicagomixtape.com and new austinmixtape.com offer compilations from local DJs. "I'm surprised how often it's coming up in discussion. It's catching more and more buzz. Royalties definitely play a part, but they're not the only thing."
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From its inception, Mixcloud was never intended to become the next iTunes. Instead, its founders — all DJs — looked at a far older music delivery platform. "We talk a lot about radio," co-founder Nikhil Shah told Buzzfeed Music from his London office. "Radio is simple and intuitive but not interactive. The listener has no control." There are obvious parallels: Mixcloud listeners can't fast-forward, sets must last at least 15 minutes (but can go on longer), and it offers no downloading capability.
Also, Mixcloud's internal architecture was designed from the get-go to facilitate royalty payments. Each set contains rolling tags that identify a song's creators. This model made the whole royalty flap that continues to roil SoundCloud something of a nonstarter. Artists' organizations like BMI and ASCAP periodically receive a flat fee; they, in turn, dole out the royalties accordingly.
Those DJs who have uploaded sets on Mixcloud figure there might be a lot fewer listeners than on SoundCloud; but they're better listeners. That's why Mixcloud has built up a reputation as the place where industry insiders go to hear whole sets — including talent wranglers for clubs and festivals. "DJs typically want to create large mixes and show off their talents to prospective employers," Ari Zoldan, a well-known tech entrepreneur known for spotting emerging trends, told BuzzFeed Music. "Mixcloud allows them to do this in a hassle-free way."
If SoundCloud is the digital music equivalent of the restaurant about which Yoga Berra famously said, "Nobody goes there anymore because it's too crowded," Mixcloud is seen as a tiny bistro favored by those in the know.
Mixcloud's problem has always been attracting the casual listener who likes the freedom of downloading music to listen to at leisure. That, in turn, has hurt it with the vast majority of DJs, who need a springboard where they might attract enough listeners to build up a fan base. "When we started five years ago, we tried to educate the uploaders, but got lots of complaints about not having a download feature," Shah said.
"SoundCloud still has the upper hand because it's the most recognizable property," Zoldan said.
"There are so many people, you can gain listeners very fast," Meehan added. "I have friends who have based their whole career on that. If they do mash-ups of two artists, they combine the followers [of both] who want to hear it."
If they can hear it. When 70% of Kaskade's content on SoundCloud went dark last June, it was proof no one was safe — their scanning software even affected someone on on Forbes' list of highest-paid DJs in the world. Kaskade's tracks were soon restored (a rare privilege), but he tweeted the experience had so unnerved him he was going to build his own music site.
British DJ Nicole Moudaber's sets are her own productions and don't contain samples. Still, she has been flagged from time to time. "The issue was always resolved once I've confirmed it's mine and doesn't contain samples," she told Buzzfeed Music. "With remixes of other artists, we tend to wait for the artist and the label in question to send an authorization for the upload."
Erasing tracks or flagging files isn't the only change that has rankled DJs. To enhance visitors' experience and keep them clicking (and eventually, clicking on ads), SoundCloud keeps adding new enhancements, like prominently featuring comments, "favorites" pages and added functionality to share tracks on social media that many DJs fear will turn off serious listeners.
As SoundCloud keeps tweaking itself in a quest for profitability, DJs used to being encouraged to upload as much content as they could now face a pay tier if they want to upload more than three hours of content. Some see a by-invitation-only tier that allows popular DJs to share in revenue from brief ad interruptions as creating a de facto caste system.
If Mixcloud finally becomes sticky with listeners and DJs, though, it may be due to the broad change in how the public consumes online music since it started. The unavailable downloads feature that once kept DJs and casual users off Mixcloud is now drawing them in. "People are streaming, not storing on media files," Shah observed. "We're seeing a lot less backlash."
That certainly jells with what venture capitalist and noted tech geek Fred Wilson wrote in his 2014 year-end wrap-up. Young people don't bother adding MP3s to their iPhones anymore, and we're all asking ourselves if we need all those terabytes of downloaded songs on our phones and hard drives. "We're getting a generally younger demographic," said Shah.
After SoundCloud signed Warner Music to its first royalty agreement with a major label in November, investors and the media cheered. They saw it as a sign the platform had finally started to figure out how to monetize its huge user and visitor base.
Mixcloud has always been self-funded and has turned down money from venture capitalists. "Money is only a means to an end," Shah told BuzzFeed Music. "It's not always a positive thing to bring a lot of money into an organization. As long as we can find a way to create value for listeners and take a share of the market, we're happy."
An earlier version of this story misquoted Garrett Brown. It was Henrix, not Aphex Twin, who'd had tracks pulled from SoundCloud.
SoundCloud has offered a creator subscription tier with options since the company began. The pay tier is not, therefore, SoundCloud "tweaking itself in a quest for profitability."