Advertising and Soundcloud’s Soul

I can imagine Soundcloud adding advertising in a way that doesn’t betray its soul.

The company’s soul is to serve sound creators. It’s not to serve advertisers. Thus browsing the site has no ads.

However some sound creators, basically the highly visible professional acts, need to monetize their plays. They don’t mind paying for hosting and a widget but that’s only part of what they need. Soundcloud is underserving them without enabling ad monetization. It serves their needs by enabling them to earn money from ads.

Problem: how can it sell advertising without gettings its incentives misaligned? It must continue to serve the bands first, not the advertisers.

Solution: If Soundcloud didn’t take any cut of the ad revenues, its incentives would remain aligned with the sound creators. It could charge a flat fee for this option, and create APIs that enabled third parties to sell ads.

The Rules

As a musician I live by Lefsetz’ creative rules, more or less. Which are:

  • Be real. No lying. No pretending to be someone you’re not. Fully inhabit the art.
  • Commit fully to the quality of the music
  • Be patient for success
  • You’re not in it for success, you’re in it for music.

But there are easy counter examples. Studio musicians do most of the performing for hit songs. And instrumentalists in general are mercenaries. The front person benefits from being a purist, but the band members need to be adaptable enough to play in a lot of bands.

Also, musicians past the age of seeking to be famous still want to play, and maturity has taught them that compromise is a lot better than not playing at all. If you love jazz piano, playing a lite version for money in an airport lounge is not awful. Just leave the grating Sun Ra riffs for another day and use the gig to indulge your Art Tatum.

The rule is that there are no rules. If the art works, the rules can change to include anything.


Lefsetz is wrong about the music business all the time. Often. Frequently. Usually.

All those things he says about what musicians need to do are more or less made up. What’s true is that he applies them to his writing.

Like here:

What you’ve got to understand is Amanda Palmer is a special person. And if you think doing it her way is going to work for you, you’re sorely deluded. The only thing that’s gonna work for you is YOU! Your personality! Your uniqueness! Your honesty!

That’s what art is. Not a cash cow, but a missive from deep inside one human being to another.

Well, yes, true for musicians. But then again, total nonsense. At this very moment plenty of musicians are profiting by copying Amanda Palmer lick for lick. And that’s fine because playing is great and you do what you have to do. Musicians can choose any rules they want as long as the art is decent.

What’s not bullshit is how this advice applies to Lefsetz’s own creative work. His heart is directly wired to his writing. He’s a real actual Writer.

Don’t think of him as a pundit. Think of him as a creator.

Billboard on Google subscription streaming service:

Under current plans, which could change as Google firms up its strategy, the Mountain View, Calif., technology giant will offer an ad-free subscription tier for YouTube viewers. In addition, it would offer another service from its Google Play platform, which currently sells song downloads similar to Apple’s iTunes and has a free scan-and-match locker service that lets users stream songs from their music library via any Internet connection. Subscribing to a Google Play music service would give listeners access to licensed songs that they don’t own, according to executives knowledgeable with the plans but who are not allowed to speak publicly on behalf of Google.

An ad-free YouTube service… /me strokes chin. So there would only be content that was on YouTube anyway? And it would alway be video, not pure audio? And no album or artist browse or other music-specific niceties? That would be a really odd and interesting user experience. I want the rumor to be true just because it’s a creative approach to the product.

The Verge has the best story I’ve seen:

We already knew that Google Play has sought licenses for a subscription music service, but now comes word that Google’s YouTube wants them, too.

the YouTube deal is largely an extension of earlier negotiations with Google Play.

sales at Google Play have improved but still aren’t generating “significant revenue,” according to multiple music industry sources with knowledge of the numbers.


By contrast, YouTube is gargantuan. Professionally produced music videos account for hundreds of millions of views, and represent some of the site’s most popular fare. All of YouTube’s music videos are available free of charge but Google indeed generates significant revenue by selling ads against the videos. Yet, some of the shine comes off YouTube’s figures when set against the overall number of users. Music industry sources say that on a per-user basis, YouTube isn’t making that much money. The labels want it improved.

Some in the music industry still worry that YouTube chokes off demand from more profitable outlets, such as Apple’s iTunes and Amazon. The Fortune story offered a telling stat: “64 percent of teenagers prefer YouTube over any other music listening and discovery engine,”


Fortune: YouTube music streaming service launching this year:

We’ve been hearing rumblings about Google’s
plans for a Spotify-killer for what seems like
forever now. More recently, there’s been word that the company’s YouTube
brand is also getting set set to enter the space, albeit with some overlap
from a Google-branded effort. *Fortune* spoke to some anonymous-type folks
in the record industry who confirmed the latter, adding that the service is
set to launch this year. The offering will apparently give users some free
streaming, with additional features being made available for a subscription
fee. The site reached out to YouTube, who offered the following bit of
hopeful non-commitment:

While we don’t comment on rumor or speculation, there are some content
creators that think they would benefit from a subscription revenue stream
in addition to ads, so we’re looking at that.

That sounds like an awkward fit. But pay per view on YouTube would be interesting.