After years skirting the line on massive copyright infringement, the music streaming site SoundCloud is going legit. Instead of fighting content owners, SoundCloud is trying to sign up all the labels to licensing deals and start charging listeners. It’s the end of an era for streaming music. Once the overlooked stepchild of file-sharing, SoundCloud allowed users to upload songs whether or not they owned the rights; now, an automated system protects the license-holders and takes down offending remixes.
If SoundCloud can make the jump to legitimacy, it will be by the skin of their teeth. There are reports that Universal and Sony aren’t happy with SoundCloud’s negotiating and are preparing to file a huge infringement suit. It’s a harsh reminder that even an established streaming site that’s valued near a billion dollars is still one lawsuit away from total oblivion. But even if it’s a precarious spot, there’s a market position opening with SoundCloud’s move. Electronic DJs and up-and-coming rappers still need a place to post their music, and their fans need a place to listen.
In a small office just south of Houston Street in New York, a small team is trying to fill that gap. Audiomack is a music streaming site, but unlike Spotify or the new Apple Music, they don’t aspire to offer a full catalog. Instead, the four-year-old company focuses on hip-hop you haven’t heard yet. Many songs on Audiomack don’t have an official distribution channel and might otherwise live on sketchy download sites littered with porn ads. Others are remixes, album leaks (sanctioned and unsanctioned), and mixtape standouts. It’s a wide variety, but the selection doesn’t overlap much with pay sites. They’re the kind of songs that can become genuine, surprise hits. Audiomack is overflowing with would-be-stars, any of whom might generate the next “Trap Queen,” a song that then-unknown Fetty Wap premiered on SoundCloud in April of 2014, a full year before it reached number two on the Billboard chart.
Audiomack is like hip-hop’s college basketball, where unsigned rappers and producers can put together a highlight reel, build a following, and publicize themselves for the draft.
In the larger of the rooms in Audiomack headquarters, screens outnumber people four or five to one, and, projected on the wall, the site’s healthy live traffic jumps up and down. With the concentrating white guys in T-shirts, it could be any web startup, except for the recording booth. Founded four years ago with four employees and $4000, Audiomack has a lot of stakeholders for a small company. First among them are artists, whose uploaded songs are the site’s content. “Labels now require you to have an audience before they sign you,” says Audiomack’s David Ponte, who came up with the idea for the site with his friend, co-founder, and fellow rap head for life Dave Macli. “They want to make an educated decision. It’s a Moneyball strategy.” For artists looking to draw listeners by any means available, Audiomack is an opportunity to prove their future potential and a bridge to intermediary goals like verified social media accounts and write-ups in magazines like this one.
As much as the music industry complains about infringements on their market, sites like Audiomack serve a useful function for labels. It’s similar to the way LinkedIn works for white-collar offices: if applicants have done a lot of the hard work already, employers can sift and compare. It’s the basis for that Moneyball strategy, and you can only play Moneyball if there’s a large pool of readily available hires. A centralized site of up-and-coming artists is a boon for listeners who like searching out music before it searches them out, but also for labels looking to rationalize their investments in new artists. Seen another way, Audiomack is like hip-hop’s college basketball, where unsigned rappers and producers can put together a highlight reel, build a following, and publicize themselves for the draft. Without the NCAA, NBA teams would have to invest a lot more money developing players. It’s a good tradeoff.
Audiomack’s focus on discovering new music is a natural fit for industry insiders, the way professional scouts are the best audience for high school ball. “Sometimes I just go on the homepage and let it play,” says Rahim Wright, head of marketing for the 740Project at Atlantic Records. “If an artist makes that list, it definitely says something. There are regional influencers, say, in Atlanta, who use Audiomack too, so I’ll check out their pages and make sure I haven’t missed anything.” And when the labels want a new song to get heard, they get them uploaded (themselves or through proxies) to Audiomack, in addition to larger sites like SoundCloud and YouTube. What looks from the outside like the copyright wild west is actually a little more organized. “We usually know when a leak is authorized,” Ponte said. “They’ll use radio DJs or bloggers, but we have a pretty good idea what’s going on.”
Labels have a lot to gain from sites like Audiomack, but they also do have something to lose. Since any users can upload songs, it’s impossible to sort out the legitimate from the illegitimate, and Audiomack doesn’t use an automated system like SoundCloud’s (which they say are unreliable) to identify and exclude copywritten tracks. Their policy leaves the site open for unlicensed remixes that have long been a genre staple, and leaked songs from signed artists. Leaks can cause significant damage to artists trying to make the jump to label stability, as when over 100 unreleased Young Thug and Rich Homie Quan songs flooded the rap internet all at once in May of this year.
Historically, labels have been quick to invoke the Digital Millennium Copyright Act and go after repeat violators, but Audiomack is trying to find agreeable solutions. “They’re very fast,” Wright said of Audiomack. “If I call them and say, ‘We’re going to have this song on iTunes, so don’t have it available for download,’ they’re on it. If there’s a leak and we want it off the site totally, they’ve got it down in one or two minutes.” This responsiveness makes Audiomack a reliable partner for content owners, but it also earns them implicit permission to keep streaming unlicensed tracks that aren’t worrisome enough for the labels to mention. Being quick to settle conflicts agreeably is a smart survival strategy for a small company, even though it requires a lot of manual work to remove offending songs. While I was writing this article, multiple uploads of Eminem’s new single “Phenomenal” shot up the site’s charts, only to be totally purged when I checked back hours later.
Like any internet company, one of Audiomack’s biggest assets is its data. With a geographic and historical overview of listening patterns, the site’s operators have a good insight into what’s coming next and from where. But instead of spinning off a consulting division, Audiomack uses their data as an incentive for its various stakeholders. If an artist wants to set up a tour, they can see where they have listeners. If a label wants to know how a new artist of theirs is resonating, they can call and find out. Soon, listeners will have access to the data too.
When I asked Ponte why, as a startup with no venture investors, they were just giving their numbers away to everyone, he paused, then answered like it had never been much of a question for them: “Because it’s awesome?” But while that may be the case, data-sharing has a broader utility for the company, especially when it comes to their relationship with labels. Unlike indifferent sharing sites, Audiomack is a middleman with skin in the game, and they rely on labels’ continued cooperation. If labels see Audiomack as a sustainable partner, one that’s easier to deal with than the alternatives, that increases their chances of lasting as part of the fragile music-streaming ecosystem. Right now, the labels seem more interested in getting market intelligence, having a testing ground for new artists, and maintaining a little bit of control than directly monetizing Audiomack’s streams. “I wouldn’t call it a bargaining chip,” Ponte says of the analytics they share. “It’s more like a demonstration of good faith.”
That good faith could well be Audiomack’s saving grace. “We speak every day,” said Josh D’Amore, who works in marketing for 300 Entertainment, the label that has signed Audiomack stars like Migos, Fetty Wap, and T-Wayne. “If it's not about launching a new content piece, it's how we can position an artist. With them it’s not about winners or losers—it's about creating an environment of winners and winners.” If labels help Audiomack to establish itself as the place to hear up-and-coming rappers, Audiomack can help labels build a certain amount of control over the market for leaks and unlicensed streams. The site’s improving market position is good for the content owners, especially if Audiomack can push out other outlets that are less concerned with being a good partner to the labels. That means Audiomack is able to get away with things that other sites can’t or don’t, which makes them appealing to a lot of different kinds of users without tilting too far in the interest of uploaders, streamers, or content owners.
For example: The number one track of all time on Audiomack is Bobby Shmurda’s “Hot Nigga” as uploaded by ShooterMuzik, whose only bio information is a picture of 100 emojis and a link to a YouTube page has been taken down for engaging in copyright infringement. Number two is “Booty,” uploaded by the verified Jennifer Lopez Audiomack account. But the number three track, Fetty Wap’s “My Way,” was uploaded by the rapper Young Obee, whose only other uploads are songs of his own that top out at 1000 listens (as compared to “My Way’s” 634,000). Other uploaders in the top 20 include radio DJs, independent labels, and rap blogs. It’s a testament to the site’s odd industry position that no single uploader has been able to monopolize the chart.
Like any other startup, Audiomack’s single-minded goal is growth. Online music is a crowded field full of big players, and what they hope will set them apart from a more established competitor like Soundcloud or DatPiff is again data-driven. A weighted algorithm based on listens, downloads, shares, and other metrics generates a top songs list. Instead of combing through regional rap blogs, listeners who don’t know what they don’t know can sit on the list and find out.
Still Ponte can’t hide some frustration when he talks about licensed music on Audiomack. “Why take a song down when listeners are just going to go to share-whatever-dot-com and get it there? Why not work with us and do something with it?” That “something” is what comes next for Audiomack: a plan called Amp that involves placing 15-second ads before songs licensed by their owners, with money split between them and the site. They’ve already signed up 300 Entertainment, and if they can get the big labels to sign on—not to license their whole catalogs like Spotify does, but to establish an official revenue-sharing relationship—that would secure their niche for the near future and reassure prospective investors that the site isn’t just another Grokster.
Trying to please everyone in the rap industry is a very delicate balancing act. How can you run a site that works for ShooterMuzik, Young Obee, Jennifer Lopez, DJ Day-Day, and Atlantic, all at the same time? “I keep my phone close,” Ponte said.