User generated content in the music business has been tried over and over again. MP3.com, MySpace, Garageband, and many others. The problem is that the consumer wants the hits, the names, the current hot artists. They don&#x27;t want the long tail of unknown artists.<p>Sure there are those who like to check out the new stuff and occasionally something pops.<p>Soundcloud will eventually end up paying the same royalty rates as Spotify, Pandora, Rhapsody, Slacker, and all the rest thus eliminating this &quot;SoundCloud has much better unit economics than Spotify.&quot;<p>What is to stop Spotify from adding an artist upload feature?<p>The macroeconomic factors on why all of the music delivery services are eventually going to fall in value has to do with Apple, Google, Microsoft, and Amazon treating music as a valueless commodity.<p>No one can charge more than iTunes for a song or streaming service. Apple sets the market price and operates their business at low margins due to ancillary revenue from hardware. If you&#x27;re a music service and have no ancillary revenue to increase overall margins, you&#x27;ve got a classic business problem. The comparison to Youtube is also flawed because it doesn&#x27;t mention that AdSense is the ancillary revenue that has kept YouTube afloat these many years.<p>Furthermore, the content owners (copyright holders) will continue to raise prices and cut exclusive deals with different providers in order to maintain their cut of the pie. You see this with the content patchwork across Netflix, Hulu, Amazon Prime, and even Youtube Red. No player has all the licenses all the time.<p>Music is a wonderful thing, but delivery is a commodity service where the players are competing on style and features. Content is ephemeral and a marketing illusion for the most part. If you want people to come, you have to have the stars.