Thursday 29 September 2016

Swapping Dublin for Berlin: the Facebook boss tuning SoundCloud

The streaming business is filled with big industry players. But Dubliner Sonia Flynn believes there's room for one more - and its 125 million tracks are a big selling point, she tells our Technology Editor

Published 05/05/2016 | 02:30

'I'm passionate about music. It's a mood thing,' says Sonia Flynn, pictured in Dublin this week. Photo: Adrian Weckler
'I'm passionate about music. It's a mood thing,' says Sonia Flynn, pictured in Dublin this week. Photo: Adrian Weckler

'I play the piano. If you want to put me on the spot." Sonia Flynn is talking about the importance of music in her life. She says that she doesn't get people who don't feel it.

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"That's an alien concept to me," she says on a brief stopover in Dublin's Talbot Street to talk about SoundCloud Go, a new subscription streaming service that aims to take on Spotify and Apple Music. "I'm passionate about music. It's a mood thing."

Flynn, who ran Facebook's Irish facility, has done more than most to pursue this passion. She left one of Ireland's top multinational tech jobs to move to Berlin for a position in SoundCloud, the global streaming service that 12 million musicians use to publish their own tracks.

And she left the Dublin Facebook office in pretty good shape. From co-ordinating a handful of people in the Grand Canal Docks during recession-hit 2009, she has moved on to Berlin, with Dublin's Facebook facility in rude good health.

But six years is a long time in the tech industry. So Flynn, who had previously served as Google Ireland's director of operations after an initial management job in Taxback.com, decided it was time to get another job.

She is now a vice president for SoundCloud, the nine-year-old company started in Sweden by Alexander Ljung and Eric Wahlforss and now based in Berlin.

"I've to figure out things like where we expand to next," she says.

"And having the deals in place so that you can open doors for business. I work with all the core teams across the company for that."

As such, Flynn is one of the people spearheading the company's expansion into Ireland and the UK with its streaming subscriptions. The new SoundCloud Go service offers a "premium layer" of bands and musicians - several million tracks deep - to add to the 100 million-plus self-uploaded tracks from other artists. In other words, it's entering into direct competition with Spotify, Tidal, Apple Music, Deezer and others. At the same time, the free version will now introduce ads.

Flynn has jumped into SoundCloud at a time when it is ramping up its ambitions as a global music industry player.

"This is the next step in monetising the program," she says. "We have 125 million tracks on Soundcloud, so this additional layer of music comes on the back of agreements we have signed with major labels such as Sony and Universal. And that's not forgetting all the artists represented by independent labels."

SoundCloud's greatest strength has been its potential for discovery beyond mainstream commercial services such as Spotify. Because of its original focus on self-publishing for bands, it has a far bigger music catalogue than its rivals.

However, there has been some confusion over whether it stocks the same number of superstar band and musician tracks as the more established players. A few searches on the service this week show that it lacks some singers' music that one might expect to find.

This a temporary problem brought about by the volume of content to be uploaded, says Flynn.

"It's just taking time," she says. "You're talking about quite a lot of material. When people ask about a missing artist, the chances are that if you check a few days later, it will be up there."

Flynn says that the premium repertoire will be comparable with those on Spotify, Apple Music and others.

"You can take it that when we sign an agreement with Sony or Warner, it's the entire repertoire of what they have which will be onboarded."

However, it is less easy to say how many premium tracks SoundCloud will actually have. The company lets bands and labels choose which section - the free version or the premium Go section - they want their music to be virtually housed in.

"It's hard to say what the split is because we give people the choice," says Flynn. "The split can ebb and flow depending on where someone decides to put it."

So there's no figure as to how many free tracks there are versus how many paid-for ones are up?

"No, because there's still a lot of onboarding going on," she says. "You can imagine with the agreements we're signing that we have a lot of content to take on board. But the bottom line is that this is really diverse. There's no one else offering 125 million tracks for €9.99."

It is unclear how many Irish users will pay €9.99, however. Users looking to subscribe on a laptop or Android phone are currently asked to pay €9.99 per month, whereas iPhone and iPad app users are hit for €12.99 per month "due to Apple's charges". (For comparison, both Spotify and Apple Music are €9.99 per month on any device.)

Pricing anomalies aside, SoundCloud's new premium Go service should shed light on other elements facing the industry. One of the carrots to signing up for the subscription fee is to avoid ads. To make this an advantage, it is introducing ads onto the free service for the first time. So if free tracks uploaded by smaller bands will now be used to sell ads for SoundCloud, will those bands get paid?

"Not immediately," says Flynn. "But given time and with music industry support, yes. We're developing a framework and an approach that allows monetisation to happen for all creators."

It's probably worth remembering that SoundCloud is still a relatively small company. As such, its commercialisation infrastructure is arguably at a nascent stage of sophistication and heavily dependent on deals cut with established record labels.

Still, the new step of introducing ads onto free-to-listen band uploads could sharpen the focus on who is getting paid for the creation of the music.

(SoundCloud isn't alone in this situation. YouTube, in particular, is coming under increasing pressure to develop deeper revenue-sharing models for musicians.)

Then there is the question of whether the company can get its audience to pay for a subscription. SoundCloud's niche appeal over services such as Spotify has been its reputation as a place for deeper discovery in non-mainstream music. That naturally attracts a younger demographic than the 30-somethings and 40-somethings that have their music collection already settled. Where the middle-aged will pay so long as there is a frictionless way to get to U2 or Beyoncé, younger folks have grown up in a climate where music is largely free. And this is one reason that they have used SoundCloud in high numbers.

So how do you get such users to suddenly pay a tenner per month?

"If we were making a change where we didn't have a free service available anymore, then I agree with you that that would be a difficult transition to make," says Flynn.

"But we're going to have the two options available. It's important that we'll continue to have a free version."

Flynn also says that younger millennials "feel very connected" to SoundCloud.

Flynn now works and lives in Berlin, a city she describes as having "hipster" qualities. She has been away from Dublin for a year, but sees similarities between her new job in SoundCloud and her old one in Facebook.

"Even though the company's been around for a number of years, it still has this startup vibe," she says. "It feels like it's not yet fully built. Some of the things are still early stage. I enjoy that."

Spotify, Apple, Tidal – now SoundCloud is aiming to capture streaming share

The online music streaming service SoundCloud has launched a new subscription competitor to Spotify, Apple Music and Tidal in Ireland.

Called SoundCloud Go, the service now offers a "premium layer" of superstar musicians such as Beyoncé and Rihanna as well as self-uploaded music from unsigned bands.

In total, the Soundcloud catalogue now has 125 million tracks which dwarfs the catalogues of rival services.

However, it is not clear whether the SoundCloud Go service's "premium" catalogue is as full as competitors, with some instances of missing artists reported.

SoundCloud executives say that the new service's premium catalogue will be comparable with Spotify and Apple and that the "onboarding" process of getting star musicians' music up onto the service takes time.

However, the paid-for service will now allow users to save songs for offline playback. It will also be advertising-free. The company is introducing ads on the free service for the first time.

A single premium account can be used on three different devices at the same time, although only one music stream can be played at any given time.

It can also be streamed when a subscriber is abroad for up to 30 days at a time, even in countries where the service is not launched. There is no 'high resolution' audio option offered, as is currently available to subscribers of Tidal and Spotify.

Instead, it streams tracks at 128kbs, which is a standard MP3 level of quality.

At the time of writing, thre is not a uniform monthly subscription fee for the service.

Irish users looking to subscribe on a laptop or Android phone are asked for €9.99 per month, whereas iPhone and iPad app users are asked for €12.99 per month. (For comparison, both Spotify and Apple Music are €9.99 per month on any device.) The disparity in fees has been put down to "Apple's charges" for iOS.

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