The Golden Rule of Product Management is ‘under-promise and over-deliver’ (otherwise known as ‘managing expectations’). If anyone needs a case study on how NOT to release a new app upgrade, SoundCloud is proving to be a rich source of material…..

Background image via SoundCloud – post-production editing by the author

Last week, SoundCloud broke the Golden Rule by releasing a new version of its iOS phone app before it was finished. It did so without telling its customers in advance – not even the paying subscribers. Only after a considerable backlash on Twitter and Facebook (and a growing number of 1-star ratings in the iTunes Store) did the company start addressing customer complaints, via a rather anodyne blog. Based upon user comments, this response has failed to placate subscribers. While SoundCloud admitted that the shiny new release was not the final product, it was unable to give any indication when the rollout will be completed.

For the uninitiated*, SoundCloud is to audio what YouTube is to video. It allows customers to upload audio files that can then be shared with and downloaded by the community of users. It is entirely powered by user defined content:

• content created and uploaded by content creators, and
• content curated by users (via re-posts, playlists and social media interaction).

Audio content takes the form of:

• music, mixtapes, podcasts, radio programmes and spoken word contributions.

Social media content takes the form of:

• likes, feedback comments, and data on the number of plays, likes, downloads, followers and re-posts.

Many content creators are Pro Users, who pay upwards of $70 a year for the privilege. In return, they get a platform for hosting and distributing their content, and access to a global community of listeners. However, unlike other music streaming services such as Spotify and Pandora, SoundCloud does not charge listeners (yet), nor does it carry 3rd party advertising or sponsored content (yet).

Although SoundCloud has been highly successful (thereby contributing to the decline of MySpace?), it faces a range of competitors – from Twitter Music and Bandcamp to Mixcloud and 8tracks (as well as the aforementioned subscription streaming services).

In recent months, there has been some industry speculation about SoundCloud’s next business move, mostly in relation to increased monetization. There has also been some commentary about copyright infringement, a new cookie policy, and access to SoundCloud’s back-end data by major record labels. Leaving aside the usual conspiracy theories (Big Brother is listening in on you), future commercial relationships with major labels could mean that record companies with more marketing budget than talent may be given preferred access to listeners’ accounts and activity, in order to promote the next generation of Lady Gaga wannabes. And this prospect has no doubt contributed to some concerns among the user community, especially content creators that fuel SoundCloud’s platform.

From the start, SoundCloud has done a couple of things really well (in addition to the widgets for embedding sound files in 3rd party websites, and a few other technical tools): first, it has made it easier to discover new music; and second, it has enabled thousands of independent and unknown musicians to get some public exposure. The mobile app has now seriously compromised both of these features, because a lot of the existing functionality has been removed or suppressed pending the ‘full’ release (admittedly, these functions are still supported on the desktop version).

In short, the new app release has created the impression that SoundCloud is focussing on listeners (rather than content creators) and plans to make it much easier for major labels to connect with consumers, thereby squeezing out the independent musicians, producers and labels who have helped to make SoundCloud successful in the first place.

*FOOTNOTE: Declaration of interest – I maintain a Pro User subscription to SoundCloud under my nom de musique.

ACKNOWLEDGMENT: Credit is due to ‘Do Androids Dance?’ (itself a beneficiary of the SoundCloud user community) for continuing to cover this developing story