Tuesday, January 3, 2012

What SoundCloud's Massive New Funding Means

From Evernote:

What SoundCloud's Massive New Funding Means

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What SoundCloud's Massive New Funding Means
By / January 2, 2012 10:24 PM /
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What becomes possible when technology cuts out the middlemen in music publishing and distribution? A lot of very strange and sometimes wonderful things.

Berlin based music and audio sharing network SoundCloud has raised a reported $50m more venture capital from the super prestigious Kleiner Perkins Caufield & Byers, Mike Butcher at TechCrunch Europe reported today. The company had raised about $16m in two previous rounds. If you're not familiar with SoundCloud, now is a good time to learn about the site. It's a vibrant and innovative community, about to either blow up huge or go down in flames with the change that comes from a large and high-priced investment like this.

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With the funding, the esteemed analyst Mary Meeker (right), who is famous for making data-packed presentations each year about the state of the web, joins the company's Board of Directors. Meeker left Morgan Stanley to join Kleiner-Perkins in November, 2010. She also sits on the Board of Directors at payments fireball Square.

Meeker's 2011 presentation on the state of the internet addressed a trend of companies growing strong in one small market and then exploding out onto the global stage; she provided 4 examples of that trend and SoundCloud was the only one of the four not yet a Kleiner portfolio company. (Waze, Shazam and Spotify were the others.) Meeker also mentioned SoundCloud in discussing her belief that sound is going to be a next major area of innovation, eg. Siri, Spotify and SoundCloud.

Meeker loves mobile and while SoundCloud's mobile apps are already good, it will be interesting to see whether and how her leadership inspires further development in global mobile applications.

What SoundCloud Means

SoundCloud is an inspiring community of audio producers and fans, leveraging new technology like widespread smart phones, cheap data storage and transfer, within a great user experience. It's reminiscent of the best things about YouTube in its early days, but it's different.

One good way to get started finding good things on SoundCloud is via the official staff collection of highlights from the site. That's where I found the WildEarthVoices account, whose recordings and favorites from other accounts are all about ambient sound recordings from nature. SoundCloud has all kinds of sounds on it though; from podcasts to thunderstorms to electronic music, music made electronically and music you might call electronica. (There's a lot of electronic music on SoundCloud.)

SoundCloud feels like the kind of creative place that the Internet was meant to be.
Like YouTube, SoundCloud hasn't been without controversy either. Last February the company began sending take-down notices to remix artists who its algorithm alleged were using copyrighted materials and presumably without permission. Critics said it was a stab in the back to the remix artists that had helped SoundCloud grow so much in its early days. The site is definitely heavily used by electronic musicians.

Not all of SoundCloud's experiments work out either, SoundCloudLabs was an effort to highlight cutting edge apps that seems to have lost steam over the past Summer.

None the less, the SoundCloud community appears to be small but growing fast. Traffic analyst firm Compete reports 2.3 million unique visitors per month, up nearly 2X year over year. SoundCloud self-reported 5 million registered users in June. It grew to 9 million as 2011 drew to a close. Pandora, for context, has 80 million registered users.

The company only added web and iOS one-click recording at the end of 2010. The acclaimed iPad app came out in October. The website still doesn't offer RSS feeds of published files.

There's something really exciting about checking the Activity stream on the SoundCloud iOS app and finding something new, then clicking through to listen with other people to music that was just posted.

SoundCloud was founded five years ago this month by CTO Eric Wahlforss, who has degrees in Philosophy, Industrial Economics, Computer Science and Business Administration and CEO Alexander Ljung, who studied marketing and Human Computer Interaction. Both are Swedish. ReadWriteWeb founder Richard MacManus did an in-depth interview with Ljung about the company's prospects this October.

From inline commenting to smooth integration with 3rd party social networks, the user experience at SoundCloud is fun. Discovery can be a little challenging but exploration is easy. It would be nice if SoundCloud would sync with my Scrobbled musical history at Last.fm and offer me immediate personal recommendations.

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The service hosts up to 120 minutes of audio for free, then offers annual subscriptions for more storage, advanced analytics and promotional materials priced at between €29 ($37) per year through €59 ($76) per month for the unlimited pro plus package.

The site offers a huge quantity of Creative Commons licensed audio and loves to interview the users of that and other content.

The SoundCloud API supports an app gallery with more than 250 apps listed and probably an even larger array of independent projects, from things like urban music catalogue CitySounds.fm to the collaborative mashup art project Instagrambient.

SoundCloud feels like the kind of creative place that the Internet was meant to be. For that to gain a big infusion of cash and the support of some of the world's leading tech investors will hopefully mean more of the same and even better for the SoundCloud community.