I've run a music blog for the past 8 years and I've used a ton of different discovery methods. In the earlier years blogs provided me with most of my content. As of the past year Soundcloud has really shown me a whole new world of music. When you play a single track it goes straight to a recommended track, generally right in the same vein as the previous track. I've found hundreds of great tracks I would have otherwise never known existed.
On an unrelated but interesting note: I'm still trying to figure out their recommended algorithm, it seems to be a mix of tags, and cross-referencing your account with who's liked/played a song. What I don't understand is if I listen to a folk song, it will generally play another completely unrelated folk song but with no folk identifiers (tags). I've concluded it's magic.
I've occasionally discovered new music from the SoundCloud recommended tracks, but at this point I follow so many users that I barely have time to keep up with what they are posting/reposting. As with virtually all social networks, the users are the content creators. Not only do they actually create the content (they might not), the bulk of what you get from them is their likes and repost.
If I catch up on my SoundCloud stream (posts/reposts) I'll switch over to somebody's list of likes. Some of my favorite producers are buried in their passion for music 24/7 and have upwards of 1000 likes to listen through.
Recommended tracks are nice, and it's something to fill the void if you are low on content from people you follow, but in my opinion it's not that much better than going out and seeking new music and artists in other ways. I'm sure as SoundCloud improves the algorithm though it could automate some of the behaviors I'm doing manually (e.g. playing content from and following users whose content is liked/reposted by the users I follow). It might be doing this already, if maybe only indirectly, I guess I just like having control. One of the most annoying things I'm afraid it could do is promote sponsored music. I love listening to music that people are passionate about, not music that is funded by large amounts of money.
On an unrelated but interesting note: I'm still trying to figure out their recommended algorithm, it seems to be a mix of tags, and cross-referencing your account with who's liked/played a song. What I don't understand is if I listen to a folk song, it will generally play another completely unrelated folk song but with no folk identifiers (tags). I've concluded it's magic.