According to a new report, SoundCloud is posing a big competitive threat to Spotify.
The streaming site recently reached a landmark licensing deal with Universal Music, to join its existing one with Warner Brothers.
If you compare numbers, Spotify has 75 million active users while SoundCloud boasts more than 175 million monthly listeners — presumably due to the Berlin-based company's ad-free service.
The two business models are radically different, with Spotify paying out over 80 percent of its revenue to content holders, while SoundCloud users tend to be happy to host their content for free in order to build a following.
One analogy being used is that of YouTube and Netflix, where the former is worth two times the value of the latter and is favoured by DIY individuals looking to grow an audience. With instances of chart-smashing artists having grown to notoriety via SoundCloud (Diplo and Skrillex being two examples), it’s seeming to be a platform continually favoured by the indie artist.
Read the full article over on Tech Crunch.
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