Soundcloud has launched advertising on the platform for the first time. It’s understood that it will also start a new paid subscription service in the “coming months” to let listeners opt out of ads.
It also appears to be in licensing talks with music labels over royalty payments and potential equity stakes – luring labels with promises of revenues and equity, effectively in exchange for not being sued for incidences of copyright infringement.
The new ad platform, On SoundCloud, launches with advertisers including Red Bull, Jaguar and Comedy Central, but the ads will initially only run on licensed content from partners, such as Sony/ATV and BMG, music distributors INgrooves and Seed, and some independent artists.
Recently Soundcloud has been embroiled in rows with artists and labels who are concerned that online radio stations and others are using Soundcloud’s API to broadcast licensed music for free. It’s a problem Soundcloud needs to address, and soon. Revenues from advertising will go some way towards paying these professional artists and their labels.
On Souncloud will be divided into three tiers. The first Partner tier is free, and allows users to join the community, share their first track, and get feedback and basic stats.
The Pro level is the next step up, allowing for more upload time, advanced tools features like Spotlight, and more detailed stats.
The new Premier tier is the advertising platform referred to above, and makes it possible for Soundcloud Partners to make money from the tracks that they share via advertising. Obviously this will also add a significant revenue stream to Soundcloud.
SoundCloud will benefit from being late to the game on introducing advertising because many other services such as Spotify did it long ago – so it will be less jarring to users.
However, for now, only content is played in the US will carry ads.
Revenue will be shared between SoundCloud and the creators. At launch, creators who want to join the Premier level can only get in via an invitation.
In June SoundCloud revamped its iOS app to get more listeners and redesigned it’s site in May.
Competitor MixCloud just added some paid features, one allows listeners to pay to remove ads.
SoundCloud says it now “reaches” over 350 million people every month, and has more than 175 million unique listeners monthly. Put another way, half the people exposed to SoundCloud anywhere on the web play at least one track. More than 10 million creators are heard on SoundCloud every year, and users upload 12 hours of music and audio every minute.
source: Mike Butcher /TechCrunch