Spotify Veteran Troy Carter Joins SoundCloud Board to Boost Indie Acts
(Bloomberg) -- Troy Carter helped turn Spotify Technology SA into the world’s largest paid music service. Now he’s hoping for an encore at another European music company.
Carter is joining the board of SoundCloud Ltd., a German music service with 175 million users. He’ll also advise the company and its new chief executive officer, Michael Weissman.
SoundCloud is popular with independent artists as a place to upload new tracks, and is the rare music service that offers both rough cuts and demos, as well as a full complement of licensed music. The catalog has more than 250 million tracks from over 30 million artists, dwarfing what’s available on Spotify.
Yet SoundCloud has struggled to turn its large customer base into a thriving business. Few of its users pay for the service, and the company’s advertising business trails competitors such as Pandora and Spotify. Now, though, the music business is swinging back in its direction: More and more artists seek to release music without signing with a major record label, and smaller acts struggle to stand out in an industry ruled by Spotify playlists.
SoundCloud can thrive by positioning itself as an artist-friendly platform that caters to independent musicians, Carter said, offering an alternative to services run by companies worth tens of billions or trillions of dollars.
“It’s built and made for independent artists,” Carter said in an interview. “What’s obvious is that the future of music is independent. We see this shift and tipping point, where more tools are available, there’s more funding and more direct connection between fans and artists.”
Carter has years of experience navigating the tricky terrain connecting artists, technology companies and record labels. He first made his name in the music business as the manager of Lady Gaga and John Legend, and joined Spotify in 2016 as its primary liaison with the music industry.
Spotify was widely criticized at the time for not paying artists enough, and remains divisive in the music industry. While Carter was at Spotify, the company doubled in size, growing from about 100 million users to nearly 200 million.
Carter is now running a company, Q&A, that works with independent musicians, and recently sold the independent distribution company Human Re Sources to Sony Corp.
SoundCloud has tangled with the record industry in the past over licensing their work, but has mostly put that in the past since Raine Group LLC and Temasek Holdings, Singapore’s state-owned investment fund, acquired a majority stake in 2017. SoundCloud’s co-founders, Alex Ljung and Eric Wahlforss, stepped aside, ceding the top job to former Vimeo Chief Kerry Trainor and Weissman, his chief operating officer.
In February of last year, Sirius XM Holdings Inc. invested $75 million in SoundCloud.
Weissman took the top job in December. Revenue has grown three years in a row, Variety reported in December.
“The turnaround process is complete,” Weissman said. “The business is in really good shape. It’s about transforming SoundCloud for the future.”
To better serve independent acts, SoundCloud has explored new ways of paying artists, tying their payments directly to their share of listening from individual users.
Most streaming services put all subscription money into a pool and distribute the funds proportionately to different record labels and royalty collectors. Those intermediaries then pay the artists. Most of the value is captured by streaming services and the major music companies, with major stars receiving a disproportionate share of earnings.
Under a new potential approach, previously reported by Billboard, some 90,000 artists would get paid directly from the service based on their share of listening from individual users.
Carter and Weissman declined to discuss any new plans for payments, but said coming up with products that benefit independent artists is their top priority.
“If you look at Apple, Spotify and Amazon, those aren’t necessarily places you’re going to go to listen to indie music,” Carter said. “Those people aren’t necessarily where artists can develop their chops.”
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