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Marketplace Study & Wireframe
Strategic Design OpportunityAaron Stern
06.27.2024
The popularity of streaming models for music audience is no surprise, but it is a highly competitive and poorly differentiated market for the platforms themselves. In the US market, Spotify, Apple, Amazon, YouTube, Tidal and SoundCloud all compete with each other with fine points of differentiation.
Streaming displaced the digital music download model though there remained a small success story in a small but influential corner of the internet.
Throughout the last two decades, Bandcamp built a strong reputation among artists and fans alike by creating a music marketplace where ~80% of every dollar goes to the artist. As of 2022, digital music purchases represented approximately $1 billion dollars of annual revenue for the music industry and pales in comparison to the $17 billion that streaming generated.
Bandcamp was the most popular destination for the dedicated fans, wary of the fraction-of-a-cent per stream payouts and became a critical source of revenue for independent artists and small to mid-size labels across the globe.
However, Bandcamp has been sold twice since 2022, and the future of the beloved marketplace has become uncertain, as the new owners have gutted two beloved features, their editorial features and Bandcamp Fridays, where they waived the platform fee and 100% of revenue went directly to artist and label. With Bandcamp’s future in doubt, the music community is looking for alternatives to support the artists, creating an opportunity for SoundCloud to enter the space.
Competitive Landscape
IFPI estimated that digital music downloads and physical copies made up around $5.5 billion of revenue in 2022. For a mid-weight platform like Soundcloud, they are long overdue to compete for this market share.
First, Apple and Amazon are SoundCloud’s biggest positional threats in the streaming hierarchy. Each firm has a media ecosystem with value propositions that Soundcloud can’t approach. Apple and Amazon’s strategy is to command greater streaming share as tributary pieces of their greater subscription offerings; their digital music marketplaces have been submerged in favor of a streaming platform.
Second, Soundcloud is transforming their business model as we speak. They are offering digital distribution to artists and modernizing their underweight user interface to address long standing user complaints.
By serving artists with distribution, catalogue management and digital revenue, they become a credible contender to digital distributors like CD Baby and Distrokid. They can challenge Bandcamp’s hold on digital music by assuming the same ethical consumption proposition to audiences while improving their streaming UX. Eventually, they could move into offering physical goods marketplace, a feature that Spotify has had for several years, and become the internet’s record store.
Audience Segmentation
- Casual Listeners - Streams music, creates playlists. Has not purchased songs, spends 1 hour a week on the app.
- Supporting Listeners - High volume of the Casual Listener behavior, has micro-influencing Taste Maker status. Purchases music, spends 5+ hours on app.
- Producers/Artists - Uploads track &, DJ sets, has ~1000 followers or more, uses digital distribution platform of some kind, looking for more monetization opportunities.
- DJs - Share similar volume of Producer/Artist behavior. Consistently looking to discover new music as well as share live sets, mixes and productions.
- Record Labels/Collectives - High volume of DJ/Producer behavior, manages a roster of artists, looking for cross-promotion opportunities, simplifying and streamlining all the disparate tools required to manage multiple careers.
SoundCloud has great strengths as a social network and as such, it can make greater community marketing efforts to draw each segment closer together. Comments and Messages have been core to its functionality from the beginning, as well as a strong differentiator from other platforms. UX research, persona development, JTBD’s and relationship maps is outside the scope of this exercise but crucial for successful feature implementation.
Design
Introducing a digital music buying features necessitates an update to the information architecture of Soundcloud’s library. As I was pursuing this case study, SoundCloud’s app has been rolling out updates to their UI, which I took as an ad-hoc design system guideline. As opposed to some other UI improvement projects that other designers have developed, I wanted to address a couple of navigational suggestions in addition to creating a checkout experience:
1. Move the ‘Stations’ feature to the lower navigation bar will improve accessibility to users who need to quickly play music.
2. Introduce the ‘Crate’ category. This will hold the user’s digital purchases and Wishlist, where they can save songs that would like buy.
3. Adding Icons to the Library improves visual hierarchy and category differentiation, reducing user cognitive load.
My design process began with a deep dive into the progressively updating UI, where I discovered the brand colors, type, shapes, radii rules and visual effects that SoundCloud’s design team deployed. I found or created similar icons in their designs, as well as making new icons for my proposed feature set. Next I performed a competitive analysis on the library page, and discovered that Apple Music’s mobile library page was an analog for SoundCloud’s design team.
Overall, I felt that SoundCloud mainly lacked visual hierarchy and in my perspective a typography system at large. I created a coherent type system for this project that improves the visual hierarchy on my wireframes.
I needed to find a good template for the mobile checkout experience. The outdoor retailer Backcountry shows excellent UX principles for their mobile system and I used their spacing principles for their input form. In my early drafts, I experimented with a light mode to distinguish it from the rest of the user flows.
The checkout flow will update Soundcloud’s “Behind the Track” button functionality by adding a “Buy Song” CTA style button. The song will be added to the users’ bag where they can checkout, resume streaming/browsing or add it to a wishlist. After filling out their payment information, they will be presented with a success screen and a notification that purchased music will be added to the Crate.
The success screen is an excellent opportunity for A/B testing microcopy effects on developing returning customer behavior. Among the current digital music stores, success screens are typically non-existent or missing all together. Some testing variables to measure could be:
The success screen is an excellent opportunity for A/B testing microcopy effects on developing returning customer behavior. Among the current digital music stores, success screens are typically non-existent or missing all together. Some testing variables to measure could be:
- Number of items added to bag.
- Number of items added to wishlist.
- Number of clicks on ‘buy song’ button.
- Number of future purchases
- Average time between purchases.
- Sign-ups for streaming subscription.
While it may seem counterintuitive to include a declining revenue stream as a part of the business model, I believe that the positioning opportunity and lack of meaningful competition make for compelling factors to pursue this as a piece of a larger strategy to gain more marketshare.
Consumption does not only signify taste and preference, it has increasingly become a factor in a moral compass. Aligning with equitable payout model is a strong positional stance that SoundCloud’s competitors can pay lip service to, but whose business model is built on reducing payout. Adding a marketplace feature will offer a compelling reason to proven music consumers to spend their dollar with SoundCloud as a place to directly support the artists. The marketplace could incentivize these music consumers to subscribe to the streaming bundle. The marketplace feature combined with digital distribution services and streaming has transformed SoundCloud from another streamer into an omni-directional music marketplace with real points of differentiation.
Consumption does not only signify taste and preference, it has increasingly become a factor in a moral compass. Aligning with equitable payout model is a strong positional stance that SoundCloud’s competitors can pay lip service to, but whose business model is built on reducing payout. Adding a marketplace feature will offer a compelling reason to proven music consumers to spend their dollar with SoundCloud as a place to directly support the artists. The marketplace could incentivize these music consumers to subscribe to the streaming bundle. The marketplace feature combined with digital distribution services and streaming has transformed SoundCloud from another streamer into an omni-directional music marketplace with real points of differentiation.
Next Steps
The most crucial step for successful implementation is and development of User Personas. The short and broad categories I created above were not based in strong empirical research but general mindsets of people you encounter.
As Soundcloud moves into a new era of their product lifecycle, it’s important that they find partners in the rapidly changing internet ecosystem. Some potential avenues that have emerged since the peak of the app’s popularity are:
As Soundcloud moves into a new era of their product lifecycle, it’s important that they find partners in the rapidly changing internet ecosystem. Some potential avenues that have emerged since the peak of the app’s popularity are:
- Buy Music Club is a community that are motivated by the ethics of financially supporting musicians.
- Substack music authors (are a growing class of content creators who cater to niche audiences and galvanize their audiences with thought pieces, critiques.
- High profile independent musicians (James Blake, etc) who have become critical of the streaming model could be offered strategic partner roles, Executive or A&R roles in exchange for their insights and cultural capital.
stern.aaron.b@gmail.com
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