As COVID-19 reshapes our economy, our newsletter will help you unpack the news from the day.
Broadcasting company SiriusXM is investing $75 million into SoundCloud, the music streaming platform known for kick-starting up-and-coming artists like Billie Eilish.
Eilish, who won five Grammys this year, went viral on SoundCloud five years ago. The platform wants to be the place for independent artists, because that makes it the place for young music lovers. Russ Crupnick, managing partner at Music Watch, said half of SoundCloud users are part of Gen Z.
“They’re tuned into music,” he said. “They’re very familiar with emerging artists. They’re super interested in things like music discovery.”
And that means money, if not from subscriptions. George Howard, associate professor of music business at Berklee College of Music, said even the giants like Spotify and Apple don’t make money that way.
“Spotify’s revenue via subscriptions is 9% of their total revenue,” Howard said. “Everybody’s betting on ad sales being the savior.”
According to Howard, most platforms are refocusing on ads, because between Netflix and Amazon Prime and Disney Plus, consumers are feeling oversubscribed.
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