SoundCloud: Information Cascades and Direct-Benefit of Users
In the age of music streaming, services like Apple Music, Spotify, and SoundCloud have become increasingly popular. Many people would rather pay a consistent rate per month to gain access to a large database of music than buy individual songs and albums. However, SoundCloud offers a service that is slightly different from others: its purpose and effectiveness are highly dependent on its number of users, which can relate to information cascades. All three services offer music from most artists on record labels, but SoundCloud creates the opportunity for smaller artists to skip the often tedious process to get involved with a label, and instantaneously share their music with SoundCloud users. While this system is particularly innovative, it relies entirely on its number of users.
There are two perspectives that are important when thinking about SoundCloud — listeners and artists. Both types of users gain a direct-benefit when other users participate in the service as well, but in different ways. Listeners have several options for streaming services that offer all the mainstream artists. However, listeners can be exposed to new music and lesser known artists that they don’t have the option of listening to on other services. The more unknown artists that use SoundCloud, the more valuable it becomes to listeners looking to find music. This works similarly for artists. Small artists don’t always want to use the time/money necessary to release music through a label, especially if they are still learning. SoundCloud provides a quick sharing service to get their music out their without effort as well as instantaneous feedback (based on comments, shares, and likes) on how they are doing. To expand on this further in terms of networks, once enough users actively use SoundCloud, an information cascade begins, since each new user adds to the potential benefit of other users for choosing SoundCloud over other streaming services.