Why I Never Built My SoundCloud Killer

While the news of SoundCloud imploding are fairly recent, musicians and producers have had a beef with the music uploading site's direction for years. I still remember when SoundCloud only gave you a paltry 2 hours worth of free upload time and managed to convert my high quality lossless WAV files to the shittiest 128 kbps MP3 I've ever heard in my life. What really pissed me off was that they demanded a ridiculous $7 a month just to double your upload time. This is in contrast to Newgrounds, a tiny website run by a dozen people with an audio portal built almost as an afterthought that still manages to be superior to every single other offering. It gives you unlimited space, for free, and lets you upload your own MP3, which allows me to upload properly encoded joint-stereo 128 kbps MP3 files, or much higher quality MP3s for songs I'm giving out for free.

Obviously, Newgrounds is only able to offer unlimited free uploads because the audio portal just piggybacks on the rest of the site. However, I was so pissed off at SoundCloud's disgusting subscription offering that I actually ran the numbers in terms of what it would cost to store lossless FLAC encodings of songs using Amazon S3. These calculations are now out of date, so I've redone them for the purposes of this blog.

The average size of an FLAC encoded song is around 60 MB, but we'll assume it's 80 MB as an upper-bound, and to include the cost of storing the joint-stereo 128 kbps streaming MP3, which is usually less than 10% the size (using OPUS would reduce this even more, but it is not supported on all browsers yet). Amazon offers the first 50 TB of storage at $0.023 per gigabyte, per month. This comes down to about $0.00184 per month, per song, in order to store the full uncompressed version. Now, obviously, we must also stream the song, but we're only streaming the low-quality version, which is 10% the size, which is about 7 MB in our example (7 MB + 70 MB is about 80 MB for storage). The vast majority of music producers on the website have almost no following, and most will be lucky to get a single viral hit. As an example, after being on SoundCloud for over 7 years, I have managed to amass a mere 100000 views total. If I somehow got 20000 views of my songs every single month, the total cost of streaming 140 GB from Amazon S3 at $0.05 per GB would be $7 per month. That's how much SoundCloud is charging just to double my storage space!

This makes even less sense when you calculate that 6 hours of FLAC would be 4.7 GB, or about 5 GB including the 128 kbps streaming MP3s. 5 GB of storage space costs a pathetic $0.12 cents a month to store on Amazon S3! All of the costs come down to bandwidth, which is relatively fixed by how many people are listening to songs, not how many songs there are. This means, if I'm paying any music service for the right to store music on their servers, I should get near unlimited storage space (maybe put in a sanity check of 10 GB max per month to limit abuse). I will point out that Clyp.it actually does this properly, giving you 6 hours of storage space for free and unlimited storage space if you pay them $6 a month.

Unfortunately, Clyp.it does not try to be SoundCloud as it has no comments, no reshares, and well, not much of anything, really. It's like a giant pastebin for sounds where you can follow people or favorite things. It's also probably screwed.

Even though I had a name and a website design, I never launched it because even if I could find a way to identify a copyrighted song via some sort of ContentID system, I couldn't make it work without the record industry's cooperation. The problem is that the system has to know what songs are illegal in order to block them in the first place. Otherwise, people could upload Justin Bieber songs with impunity and I'd still get sued out of existence. The hard part about making a site like SoundCloud isn't actually making the website, it's dealing with the insane, litigation-happy oligarchs that own the entire music industry.

SoundCloud's ordeal is mentioned in this article. Surprisingly, it took until 2012 for them to realize they had to start making deals with the major music labels. It took until 2014 for many of those deals to actually happen, and they were not in SoundCloud's favor. A deal with Warner Music Group, closed in 2014, gave Warner a 3-5% stake in the company and an undisclosed cut of ad-revenue, just so SoundCloud could have the privilege of not being sued out of existence. This wasn't even an investment round, it was just so SoundCloud could have Warner Music Group's catalog on the site and not get sued!

At this point, you have to be either very naive or very rich to go up against an industry that can and will send an army of lawyers after you. The legal system is not in your favor. It will be used to crush you like a bug and there is nothing you can do about it, because of one fundamental problem: You can't detect copyright infringement without access to the original copy.

Because of this, the music industry holds the entire world hostage with a kind of Catch-22: They demand you take down all copyright infringing material, but in order to figure out if something is copyright infringement, you need access to their songs, which they only give out on their terms, which are never in your favor.