SoundCloud's growth tempts suitors

BERLIN – Just the other week, SoundCloud founder and chief technology officer Eric Wahlforss told USA TODAY that his team of 300 had no business plans beyond growing the 6-year-old audio platform, which has gone from a hub for electronic music creators to a favorite tool for artists such as Snoop Dogg and Justin Bieber.

"There are no IPO plans or anything like that," Wahlforss said in the company's modest offices. "We're focused on growth and have exciting things in the pipeline."

For a while, those exciting things might have included Twitter buying SoundCloud, most recently valued at $700 million. But a Tuesday Wall Street Journal report cited unnamed sources saying "the numbers didn't add up."

While that deal may be dead, persistent buzz about Apple buying Beats Electronics, which includes its new streaming Beats Music service, only goes to showcase how hot online music plays are of late as they provide companies with instant access to a community of passionate users.

The whispered about Twitter and SoundCloud marriage on paper seemed to benefit both parties, providing the former with a much-needed uptick in growth numbers thanks to SoundCloud's 250 million-plus user base, and the latter with Twitter's powerful ad operation that is set to bring in $1 billion this year.

Acquisition candidate or not, SoundCloud's future looks promising.

"There are other platforms out there, like Mixcloud and Bandcamp, but (SoundCloud) has really become the place to have your audio online," says Nina Ulloa of Digital Music News.

"It works on a variety of levels," she says. "There's the follower aspect, where you can see who likes what you're either recording or listening to. There are the small artists hoping to get discovered. And big players like (deejay) Diplo's label, which is busy looking on SoundCloud for the next big thing."

Pioneering rapper Snoop Dogg, also known as Snoop Lion after this Rastafarian conversion, has made a name for himself in the SoundCloud community. He trolls the site looking for unsigned talent, sometimes leaving "SnoopApproved" postings and, in one instance, flying to Poland to record with rapper Iza Lach, whom he subsequently signed to his label.

"Once I got on SoundCloud, I started uploading beats and vocals for my fans to build off of, that's how 'SnoopApproved' came about," the rapper tells USA TODAY in an e-mail. "SoundCloud is changing the game because they made it easier for artists to reach people directly with new music. And it's cool for artists, too. You never know who is listening. It could be me."

Wahlforss, a programmer who launched SoundCloud with some friends in 2007 solely as a means to more easily share his own electronic music compositions, seems pleasantly shocked at the site's mushrooming growth.

"We did this just because there was nothing out there the solved the simple problem of sharing a piece or music or audio online," says the soft-spoken Swede, who set up shop in Berlin because of the energized feeling in this European tech hub. "We had milestones along the way, where we saw people using it in novel ways."

That would include comedian Jon Oliver's using SoundCloud to host his series The Bugle, composer Hans Zimmer leveraging the site to find a promising new hire and, most recently, Justin Bieber dropping his new single, Hard 2 Face Reality, via his SoundCloud account, where he goes by Sir Bizzle.

That sort of cultural heat would certainly justify interest from Twitter and other suitors, but it's clear SoundCloud execs sense their future is bright regardless of a possible acquisition.

"When we started, this was about friends sharing music with friends, or a business using us to share clips, like a diving company owner in Florida who would share clips of whale songs to promote his business," says David Noel, an early SoundCloud employee who now serves as community manager and evangelist.

"What was just a workflow tool turned into something unanticipated, which was communities of artists interconnecting and creating new music," he says, adding that beyond having early Dubstep tracks and Lorde singles first surface on SoundCloud, today new musical genres bubbling up on the site include Witch Hop, Trap and Mermaid. "A third of our users are in the U.S., a third in Europe and the rest all over the world. But clearly music knows no borders."

What still eludes SoundCloud is a steady revenue stream beyond those who opt for the non-free version of the service at between $4 and $12 a month. Wahlforss says the company's new office in New York – there are also outposts in San Francisco and London – is a place "where we hope to connect the dots between advertising and rights holders."

On the former front, a recent score was getting Levi's to use SoundCloud as the audio portal for its "Make Your Mark" cross-country ad campaign. Each time Levi's scouts found new musical talent, they uploaded images to Instagram and audio clips to SoundCloud.

But when it comes to the more complex and critical task of securing licenses from music labels, Wahlforss says, "I can't talk about specifics, but they're progressing." He likes to stress instead how mainstream artists can glean invaluable insights through SoundCloud's analytics, such as planning a tour based on a city-level view of where their music is most popular.

"It's all about the community we've built in the past five years, and what they are saying is, 'What we want from you guys is to help us find an even bigger audience,'" says Wahlforss, who used SoundCloud to help hone the sounds on his latest album, a 2012 release of music he calls Church Step, influenced in part by the music played in his mother's church in Sweden. "We've proven our concept. We just want more people to use it every day."

Is that a chirp we hear?