Hi
@Kony and
@Vonk
I'm the first to admit that I struggle with pricing. It really is a suck it and see thing for me.
I completely take onboard what you're saying but (you knew there'd be a but didn't you) I feel strongly that I need to draw my line in the sand and see what happens. The beauty of being small is that I can change and re-align when I have the data.
That being said, I'm not totally stupid (quiet at the back....) and I kinda pretty much totally agree with you. Can you make a suggestion as to what the "lite" tier should be?
Or what would be more attractive to you in the "Pro" tier?
Both of these points bearing in mind that I need to keep the lights on (servers, databases etc)
Cheers would love to see what your breakdowns of "lite" and "pro" look like.
I've thought about this a bit and don't know if the pricing is the issue but the business model itself.
If you look at how Soundcloud started in 2008, they were up against MySpace and knew that membership numbers would be a key factor for growth - which is why they had a good free model.
Soundcloud got €2.5 million investor funding in 2009. Soundcloud also got an additional €10 million venture capital in 2010. A lot of that money would have been used to a) stay afloat and b) marketing and product development.
For a new company to go up against a major player already established in this space, a lot of funding is going to be needed. A major long-term source for revenue is going to be advertising (and membership - and licensing), but advertising revenue won't be much of an option without large membership numbers.
In 2011, Soundcloud had 5 millions users - by the following year, there were 15 million Soundcloud members. In other words, something like this would need to scale up massively and quickly and requires large sums of money to do that - especially to compete with a player already dominating the market.
There was a lot of product development going on at the same time in an untested market so the ability to diversify and upscale was high. A lot of the bases have already been covered by now so real-time tracking as a USP isn't going to be enough in my opinion. I'm not sure how big a factor your USP would be for growth. For example, I know some of my tracks are on people's playlists. Would I really need to know if they were playing my tracks every day and at what time?
When investors get pitched for something, one of the first questions they will ask is: "is there a competitor already doing this?" and "what's stopping them from offering the same USP?". In other words, if Songbox were ever to get into a position to eat into Soundcloud's market space (and I honestly and sincerely hope that does happen and Songbox has a bright future), what do you think Soundcloud's response would be?
Having said all that, Soundcloud has had its own issues over the last few years: licensing issues, failed acquisition issues, and closing down offices with staffing cutbacks in a bid to remain profitable.
If I had the choice, I would offer your USP for free now - go on a massive advertising/marketing campaign, build up some large membership numbers as quickly as possible, and take it from there. I say this because I really do think that, in the space that you're trying to occupy, you need to grow exponentially and quickly in order to have any chance.
Songbox does look good and I honestly wish you massive success - just wanted to elaborate as to why I think the free option has to be better than Soundcloud's.