The Soundlot: A Bizarre Hypothetical

What if Chance The Rapper leads a rag-tag group of underdogs to save SoundCloud from Len Blavatnik’s Access Industries?

The hubris-and-downfall saga of SoundCloud careened into what might be its final climactic chapter this week upon reports that the struggling company had unexpectedly axed 40% of their staff, closed two offices, and only had enough cash to last until Q4 (about 50 days from now).¹

While SoundCloud disputed that last figure and defended the firings as necessary for keeping the company long-term viable,² it’s difficult to imagine that even these drastic cutbacks could bring the company’s costs (and debt obligations) down to a level which their income streams could realistically cover. Because of this chronic inability to sustainably monetize — even after hundreds of millions in venture capital — SoundCloud’s been on the ropes for years.

In 2016, Spotify was looking at buying SoundCloud (they didn’t), and the roundabout asking price has plummeted from around $1B to $250M since then. In the mean time, SoundCloud continued to lose users as it failed to become profitable and made some questionable financial moves to prevent from completely imploding (like taking out $70M in debt financing earlier this year, as the VCs turned off the tap, declining a $100M ask).³

The VCs are getting desperate for some kind — any kind — of exit strategy.

The news of these most recent cutbacks broke only a week after reports that Deezer is now in talks to purchase SoundCloud. Deezer is a France-based streaming service which operates kind of like Vevo [ie: exclusive licenses for particular record labels and publishing companies in particular international regions]… and as of September 2016 is now majority-owned⁴ by our favorite Ukrainian Oil Oligarch: Len Blavatnik of Access Industries (whom I wrote about extensively in this article about the finances of Katy Perry’s “Chained to the Rhythm”).

If Deezer/Access Industries does buy SoundCloud, this would create a situation where both the “Big 3” juggernaut Warner Music Group and punky DIY SoundCloud would be passing their money to the top of the same food chain: a gigantic multinational conglomerate which owns or hold shares in everything from petrochemical giants like LyondellBassell and EP Energy to luxury resorts like the Grand-Hôtel du Cap-Ferrat (the premier “Palace” on the French Riviera).

Just as all of this was sinking in, an Unlikely Hero stepped up to the plate…

I love this. Who better to shepherd SoundCloud through its darkest hours than a brilliant musician who used free online platforms to reach an audience in a way which would have been completely impossible before the circumvention of traditional industry gatekeepers which this technology allows?⁵

But here’s the rub: Blavatnik is a multi-billionaire. In 2015, he was the richest man in the UK with a net worth of ₤15B. His company Access works on the kind of financial scale that’s hard to conceptualize, where (for example) they had enough in the coffers to pay $3.7B in cash for Warner Music Group during the nadir of the Music Industry Contraction in 2011.

Now, Chance the Rapper is currently doing quite well, but his net worth is measured with Ms, not Bs.⁶ The fact is, without some kind of outside help (or going into massive debt), Chance isn’t anywhere near SoundCloud’s estimated $250M asking price. But what if he puts a team together?

Like Bruce Willis and his band of orange-suited misfit oil rig buddies slow-motion sauntering to their space shuttle; or superstar lawyer Gordon Bombay, forced by his own irresponsible behavior to reluctantly coach the floundering Mighty Ducks — what if Chance the rapper acted as the spearhead for a group of rebellious upstart musicians to save SoundCloud from the clutches of a billionaire industrialist?

This isn’t exactly far-fetched, rap artists have a long history of engaging in commercial endeavors (from Adidas to Cîroc to Vokāl to Beats)— but the peculiar socio-cultural-economic factors of the late 2010s present a completely unique take on this idea:

In the 90s, popular rap artists often presented themselves in narrative contexts as lone-wolf mafiosos in a winner-take-all quest for the almighty dollar. In the 2010s though, both chart-topping rap artists like Drake, Future, and A$AP Rocky, and notable independents like Chance and lil Yachty now operate in narrative spaces of extreme ambiguity, both emotionally and economically. As Drake lackadaisically comments on If You’re Reading This, It’s Already Too Late, “10 bands, 50 bands, 100 bands… Fuck it, man. Let’s just not even discuss it, man.”

Just a few weeks ago, the New York Times ran an in-depth, 2,500-word article attempting to introduce their readers to the new crop of ascendant (though occasionally troubling) “SoundCloud Rappers” who have already captured the hearts and minds of The Youth.⁷ That some of these artists bristle at being labeled a “rapper” and prefer “rock star” is illuminating; and as they adopt the DIY fashion aesthetics (and creative philosophy) popularized by punk bands formed in Thatcher’s England… one wonders if particular parallels in the level of political turmoil and economic unrest between these two eras might result in some of these new artists adopting similar collectivist economic philosophies. Like, what happens if Lil Pump and Smokepurpp end up getting super into Crass?⁸

All this is to say: Chance can’t do it on his own. But… he doesn’t necessarily have to cozy up to giant corporations or reach for the poison chalice of Venture Capital. As the internet age moves irrevocably towards flexibility in all forms, the time for ambitious, large-scale collectivist experiments has never been more ripe.

And what better place to start than SoundCloud? Millions of people use it every day, and the primary reason it’s currently circling the drain doesn’t have anything to do with the actual website or the services it provides — it’s purely a monetization and financing issue. If our hypothetical Chance-led collective can pony up the dough to allow the VCs to wash their hands of this whole debacle with some kind of reasonable exit… then all bets would be off, strategy-wise.

Combining the quick-pivoting (and fail-faster-ing) management of a tech company with (literally) radical new ideas from young musicians with enough wherewithal to participate in a project of this scope could prove to be a revolutionary experiment. What if we pivot SoundCloud into pressing vinyl, like Bandcamp? What if we pivot SC into a live event juggernaut, using data analysis to inform the touring routes and lineups? What if we pivot SC to exclusively selling fidget spinners and vape pens?

Even if this experiment crashes and burns in the most spectacular fashion, I guarantee the world will benefit from its existence in some way. After all, the Oneida Colony might not have survived the 1880s, but their afterlife as a silverware manufacturer has now completely eclipsed their, uh, youthful dalliance with experimental sexual and economic collectivism.⁹

In any event, if the alternative is the exact same multinational conglomerate owning one of the three most dominant commercial music groups and a streaming website that’s designed to cater to completely independent artists… maybe adding one final insane chapter to the SoundCloud story before running the whole thing into the ground is the preferable option?

So here you have it. The Sandlot is slated for development, and the asteroids are heading for Earth… Chance the Rapper, it’s time to get the crew together and win the championship / save the planet. I believe in you!






[5] And, frankly, which might be increasingly impossible as these same online platforms institute new algorithmic gatekeepers to ensure their continued existence via the very same monetization stability which Soundcloud has failed to achieve.