SoundCloud has always been my favorite social network / music streaming service. It is easy to use, well designed, great for discovering new indie music, and has a great mobile application. They most recently reported a user base of 175 million people per month, more than four times of their biggest competitor Spotify. Although the platform has been one of the go-to sources for artists big and small to share their music, they have come under fire in recent months. They have been struggling with copyright infringements and licensing issues, especially with the three major labels. One notable incident involved famous DJ/Producer Kaskade taking down his SoundCloud account because many of his songs were removed by Ultra Records when their label deal expired, claiming he had infringed on their copyrights for the music.
Well… nothing great can be free forever. In response to the pressure from the labels to pay out streaming royalties and dealing with the copyrights they own for the music, SoundCloud has announced today the launch of the first advertising initiative. “This phase is where we start to figure out how to generate revenue and help our creators make money in order to enable them to build careers with us,” Jeff Toig, Chief Business Officer for SounCloud told Billboard. The program, called “On SoundCloud”, will allow Premium Accounts to being to monetize on their music, but by invite only. The advertising model will include five ad products: native, audio, display, channel sponsorship and contests. They also announced Red Bull, Jaguar, Sonos, Squarespace and Comedy Central are the first five ad partners at launch.
SoundCloud users have always loved the platform for being free to use and ad-free. With this new integration of brands, time will tell if this turns people away to other music sources, or if the current user base will accept this new way of listening. SoundCloud is also exploring other ways to allow listeners to avoid ads. As Pitchfork stated, “SoundCloud plans to offer an advertisement-free paid subscription akin to Spotify.” Of course, this all comes in the wave of issues SoundCloud faces as it gets larger by the day. Not only do they have issues with the major labels, but indie labels are trying to get their cut of the pie too. “Some independents are negotiating with SoundCloud for equity stakes in the company; in exchange, the labels will agree not to sue SoundCloud over past copyright infringements” says the New York Times.
What do you think of this new ad initiative being introduced in SoundCloud? Would this turn you to a new platform, or are will you continue to use the service despite these changes? Let us know @CashmereAgency!
- Kyle (@kyledineen)