SoundCloud CEO Discusses Profitability, Superfans, and the Future of Music at Trapital Summit

In a candid conversation at the Trapital Summit, SoundCloud CEO Eliah Seton offered a deep dive into the platform's journey from financial instability to becoming a profitable and innovative leader in the music industry. With topics ranging from superfans to monetization strategies, Seton painted a clear picture of SoundCloud's evolving role in the digital music ecosystem.

From Crisis to Profitability: SoundCloud's Transformation

Reflecting on the platform's turbulent past, Seton acknowledged SoundCloud's near-collapse in 2017, a period when even Chance the Rapper publicly rallied to save the platform. Fast forward to 2023, and SoundCloud is not only profitable but thriving across financial, operational, and cultural dimensions.

"SoundCloud is the healthiest the company's ever been," Seton stated. "We're profitable, generating cash, and seeing record-high subscriber numbers." He emphasized that this transformation hinged on a laser focus on SoundCloud's unique value proposition: serving as a two-sided marketplace where creators find fans, and fans discover new music.

The Two-Sided Marketplace: Fans and Creators

Seton broke down SoundCloud's dual business model into two main segments: the fan business and the creator business. On the fan side, SoundCloud operates as a social music platform, with over 400 million tracks available — far beyond the offerings of traditional DSPs (digital streaming platforms). The focus is on discovery, with over half of listens coming from new music, compared to just 15% on other major platforms.

On the creator side, SoundCloud supports tens of millions of artists, offering subscription-based tools and AI-powered capabilities to help them cut through the noise and connect directly with fans. "The thing artists want most is to get heard," Seton said. "We’re the only creator platform in music with direct access to fans."

Superfans: Unlocking New Value in Music

The conversation shifted to superfans — a term increasingly central to the music industry. Seton explained that superfans spend six times more on music annually than average listeners, yet traditional streaming models offer limited avenues for monetizing their enthusiasm.

"Streaming is not enough," Seton asserted. "For most artists, streaming revenue won't pay the bills. And for superfans, streaming isn't enough to satisfy their desire to connect with their favorite artists."

SoundCloud is addressing this gap with initiatives like merch sales, paid private links, and exclusive early access to content. Seton highlighted the potential of paid private links, where artists can charge superfans for exclusive access to unreleased tracks. "If done right, an artist can make more money from a two-dollar paid private link than from streaming revenue over their entire career," he explained.

Innovation and Experimentation: The Path Forward

Seton underscored the importance of innovation, highlighting partnerships with AI-powered music creation tools like Fadr and Soundful. These collaborations enable creators to experiment with new ways to engage fans, from remix contests to exclusive virtual experiences.

"We want fans to play with music," Seton said, envisioning a future where superfans can express their loyalty in creative, gamified ways — perhaps even dressing virtual avatars in SoundCloud-branded gear.

SoundCloud's Search for Strategic Partnerships

The conversation also touched on SoundCloud's openness to new investment and strategic partnerships. With a fragmented shareholder base and shifting market dynamics, Seton emphasized the company's goal of finding partners who share their long-term vision.

"We’ve earned the right to be transparent about this process," Seton said. "We're healthy, we're profitable, and we're ready to scale and define what's next for music."

A Prediction for the Industry: Change is Coming

Seton closed the conversation with a bold prediction: significant change is coming to the major label business model. As artists gain more independence and the value of legacy catalogs shifts, he anticipates a wave of deal activity and structural changes within the traditional music industry.

"Majors will need to adapt, and I believe they’ll have the courage to do so," he said.

SoundCloud's Vision for the Future

SoundCloud's journey from crisis to profitability is a testament to the power of focus, innovation, and understanding the needs of both artists and fans. With superfans driving new monetization opportunities, creators leveraging AI tools, and fans engaging more deeply than ever before, SoundCloud is positioned not just as a streaming platform but as a dynamic social ecosystem for music.

"We were founded to connect artists and fans directly," Seton concluded. "If super fandom is going to be monetized, it's going to happen on SoundCloud."