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SoundCloud introduces ad-funded monetised accounts

By | Published on Thursday 21 August 2014


SoundCloud has this morning announced long anticipated changes to its accounts for content owners, which will introduce advertising into the mix and allow content creators to share in the revenue said advertising brings in.

These are changes that many have been saying the streaming service should make for some time, of course. As it has grown, SoundCloud has shifted from its original proposition as primarily a provider of streaming services to content creators, with founder Alexander Ljung saying back in 2012 that he wanted his company to become “the YouTube of Audio” (a title it will now need to wrestle from YouTube itself).

SoundCloud has been known to be testing a new ad-funded system in recent months, and rumours that it would launch this week have been circulating over the last few days.

Ad revenue sharing will only be available to content owners on SoundCloud’s new Premier account tier, which is currently offered on an invite-only basis. Users on this tier will get certain extra features above others, in addition to being able to monetise their content, such as improved stats, a snazzier profile, and the automatic ability to upload an unlimited amount of audio.

Below that is the Pro account, which costs £4 per month or £35 per year, allowing a maximum of six hours of content. Users on this tier can upgrade to Pro Unlimited, which has the same features, but allows unlimited uploads. That will cost £9 per month or £79 per year. Then there’s the basic free level, which allows three hours of content to be uploaded.

Of course, this is not the only thing some have been calling for from SoundCloud. The service remains unlicensed, meaning that recording artists and songwriters do not automatically earn royalties when their music is played on the platform, where they would from places such as Mixcloud or Spotify.

Talks between SoundCloud and the labels regarding getting licenced have been rumoured on mutliple occasions, including very recently. Today The New York Times says that the new ad-funded model is part of these talks, and is laying the ground for premium accounts for listeners. These would remove advertising from the service for a fee, and fund royalty payments.

A spokesperson for SoundCloud did not comment on this when approached by CMU, but stressed that the new ads system was in itself designed to benefit content providers, saying: “Every time users see or hear an ad, artists get paid. We’re offering a sustainable business model that benefits SoundCloud and creators, with the majority share of revenue being paid out to Premier Partners. Advertising also keeps our platform open and free for millions of people around the world”.

Announcing the new programme, dubbed On SoundCloud, Ljung said on the SoundCloud blog: “As artists ourselves, Eric [Wahlforss] and I started SoundCloud with a simple vision. We wanted to develop tools for creation, help the creators reach fans all over the world, and shape a way we could pay the creators who fuel the growth of SoundCloud”.

Talking up the ad-funded element of the new SoundCloud, he said: “When someone sees or hears an ad [on SoundCloud], they’re supporting an artist … We often hear people say, ‘I’m On SoundCloud’. Now we’re happy to be able to offer even more for the millions of creators who have made it the best place in the world to share and discover music and audio”.

Adverts from “select brand partners” will now appear on audio uploaded by “a small group of creators” invited to join the advertising programme, before it is rolled out further in the coming months.

Explaining further, a spokesperson for SoundCloud told CMU: “The launch Premier partners were selected based on their good standing within the SoundCloud community, their proven ability to build an engaged audience, and their growth over time”.

The announcement follows recent reports on warnings issued by indie label trade bodies AIM and A2IM. The organisations told their members earlier this month to consider not allowing their music to be used by third parties accessing the SoundCloud API. The terms and conditions of this grant royalty-free use of any music accessed in this way.

According to Motive Unknown’s Daily Digest
, the warnings were prompted after evidence showed that some radio stations in the US had begun sourcing music through the API because it was cleared for free use.