MixCloud just became the latest music-streaming startup to begin inking licensing deals with the major labels. The user-uploaded radio and mixtape site just signed on with Warner Music, signaling a move toward some kind of more on-demand music service. (Until now, MixCloud has operated more like an Internet radio service, which relies on statutory licensing rather than direct deals with labels.) Now it just needs to sign deals with Universal, Sony, and the indie labels in order to launch . . . whatever it’s cooking up.
Details of MixCloud’s plans are scarce, but its cofounder told the Financial Times not to expect yet another $10-per-month subscription service. That’s good, because while we frequently see headlines like “Music Service X Signs With Major Label,” we virtually never see announcements about those services becoming wildly profitable. SoundCloud’s business struggles–now in the process of being addressed under new leadership–nearly took the company down in its quest to become a licensed subscription service. Not even long-established services like Pandora and Spotify have managed to turn an enduring profit.
The tricky economics of streaming music–illustrated most dramatically by the very public challenges faced by companies like Tidal and SoundCloud–have left little hope that a sound business model can be forged around songs streamed from the cloud. But who knows? Maybe MixCloud has some fresh ideas.