A TASTE OF RAINMAKERS 2024:
ELIAH SETON
SoundCloud CEO Eliah Seton is very much in the process of transforming the highly influential DSP, which was a key factor in music discovery during the dawning days of the streaming revolution, for the present ecosystem. Now, the exec—who served a significant tenure on the label side as a Warner Music Group exec—and his team are also laser-focused on amplifying the role of fans.
A number of artists who first blew up on SoundCloud went on to big success at major labels, including Post Malone, Billie Eilish, Shaboozey, Lainey Wilson and Zach Bryan. Now Seton and company are hoping for a similarly big arc for a slew of new acts, such as teen R&B/hip-hop phenom Laila!, whose early SoundCloud action has translated to big activity at TikTok and inroads at Spotify.
What’s top of mind for you at this point in your tenure?
SoundCloud is the healthiest it’s ever been. We needed to put ourselves in the driver’s seat of where this company was going and really put SoundCloud’s destiny in our own hands. It’s a 17-year-old startup that has lived many lives, and everybody’s got their preconceived notions. Those first six, nine months were about getting the business as healthy as possible, and that meant getting profitable. We got there for the full year of 2023. Being able to step back and take a clean sheet of paper to how this business is structured, how we’re organized, how we work and really integrate music and tech was a major opportunity to get us healthy, and we’re a profitable growth company for the first time.
What was key to getting you there?
The most important was putting ourselves in a position where the operating metrics could really flourish. We are breaking records at every metric—record fan subscribers, record ad sales, record creators, subscribers, record usage, record engagement metrics and obviously record revenues and record profits. That is really an output of this integrated music-and-tech approach that has changed the way we operate.
The healthy outlook extends beyond just the P&L and the operating metrics to the product. Our usage for a long time was retained because of brand loyalty—folks who were passionate SoundCloud users, who kept coming back to the platform and the app. But for a long time, that app and that platform were not as active and were somewhat dormant. The last two years, that’s totally changed and our product leadership, led by Rohit Agarwal, our chief product officer, has been totally turned around.
We’ve got 400 million tracks on the platform. A traditional DSP has about 100 million. We’ve got all those through our content licenses and we’ve got another 300 million user-generated content tracks by unsigned artists. Those creators are paying a subscription for access to products, tools and services to begin and advance their careers. That’s our flywheel—our virtuous circle of fans and creators coming to the platform to find one another and engage with one another in a unique way.
Let me ask you about these creator tools—what are they and how do they benefit creators more than what’s available elsewhere?
The place I would start is to articulate SoundCloud’s point of differentiation, as we are the only place exclusive to music that connects artists and fans directly. So, you’ve got those hundreds of millions of fans coming to find what’s next in music. You’ve got those millions of creators coming to find those fans. When I was at Warner Music Group and working for Steve Cooper, the then-CEO, he had been the CEO of companies across probably a dozen different industries, and his great frustration in music and at the major-label side was that they would spend a billion dollars in A&R and marketing and promotion and have no access directly to the end user, the fan.
As the only creator platform in music that has direct access to audiences, a big part of that value proposition for creators is to get them heard. Internally, we call this “Get heard, get fans, get paid.” There are 46 million tracks on streaming platforms that don’t get any listens, and some of those may be bots or noise or rain on a tin roof, but most of them are real live artists who are unable to find fans, engage with fans and earn income from streaming. We can access fans directly, so we can get those artists heard. We’re solving what is known as the “zero plays problem” and we do that through our creator product.
Since you worked at a major label and understand how one operates, give me your sense of how the majors fit into the present ecosystem.
That’s a great question and one that is close to my heart and mind because I did spend a good chunk of time in the major-label system. What’s clear is that the history of commercial music has lived with content owners, rightsholders and the major labels. The future of music, we believe, will live with global, scaled platforms that connect artists and fans directly. If you were starting a new company in music and tech today, the first two things you’d want to have are direct access to artists and fans at scale and the ability to connect artists and fans without anything in between on the platform. That’s what SoundCloud has been doing for 17 years, and I think now the industry is finally ripe for that.
Can you elaborate?
Streaming is not enough for the fans who are looking to actually spend money, and, from their business model, I think we know streaming is not enough for streamers. For us, that’s an underlying premise, because we’re the one platform exclusive to music that actually connects artists and fans to be able to monetize the engagement between them. And rather than dividing the streaming pie into thinner and thinner slices in what inevitably is a zero-sum game with decelerating growth, we’re talking about putting new pies on the table—new sources of income that will allow more artists to get paid more from different forms of monetization beyond streaming, and for fans to express their fandom on the platform and create new formats for monetization beyond what exists today,
How does the monetization part manifest in terms of the actual user experience?
As a baseline, having artists and fans engage in ways beyond streaming allows us to start running experiments. A fan might come to the platform to stream a track, but they’ll stay on the platform to engage in some other way. They’ll comment on the track, they’ll repost it, they’ll share it, they’ll DM with another fan, they’ll DM with an artist, or they’ll react to comments.
Starting to experiment with these forms of engagements is a big part of our current roadmap, so we’ve done that, for example, with private links. We have 100 million tracks on the platform that are not yet published.
As far as integrating merchandise, we’ve run a few experiments where we’ve bundled a track with a T-shirt. We’ve sold exclusive vinyl to artists on an experimental basis. Ultimately, what these experiments are showing us is that the latent willingness to pay is there. Fans want to express their fandom monetarily, and artists are jumping at the opportunity to find ways to make income on the platform.
Finally, let’s talk about you. I really wanted to talk to you about your early life, and notably how music first became prominent in the picture for you.
Be careful what you wish for, because I will share. My grandmother was an opera singer and one of the first women to matriculate at Curtis Institute, the famous conservatory. She became a vocal coach on Broadway who would teach Hollywood actors and actresses for stage voice. She taught Katherine Hepburn and Audrey Hepburn and Johnny Carson and Barbra Streisand out of my grandparents’ apartment in Hell’s Kitchen, where they raised my father.
I sang in lots of different groups growing up, one of which was, I’m embarrassed to admit, an a cappella singing group in college. It really transformed my life for two reasons. One, I met my husband in that group. We sang in it together, and 20 years later here we are married, with two children and a dog. In that group, I served as its general manager as well as performing in it. I had recognized by this point that I was unlikely to succeed as an artist and a performer in my life. But it taught me at the age of 21 that I wanted to run a creative enterprise. I needed to go get a business education, so I did.
When I got out of my MBA program in 2009, what better place to go to when the world was totally upside down during the global financial crisis than an industry that was even more upside down than that? I got my first gig in music that fall of 2009, and I suppose the rest is history.
