The popular free-to-use music streamers is bringing in ads
SoundCloud has, since its inception, been a mish-mash of unsigned, independent and major artists to showcase their talents, drop teaser-bites of new material and even stream entire albums.
With 175 million monthly listeners, it’s the second biggest streaming music service in the world, sitting only behind YouTube, but, unlike the other music streamers, it hasn’t paid any royalties to rights owners. The artists and labels uploading Sounds to the Cloud realise there’s something else to be gained by using the platform: exposure.
But these times are changing; SoundCloud is moving away from the current model, which has gleaned $100m of funding since 2007, and moving towards a three-tiered monetized ad scheme, which, according to SoundCloud chief executive Alexander Ljung, won’t be the invasive ad-experience most of us think of when online and on-app ads are introduced.
“We wanted to avoid this being a bunch of unthought-through ads in your face. You won’t open the site up and see a bunch of banner ads plastered everywhere. It’s elegant,” said Ljung to The Guardian. “Our set of launch advertisers have done a really great job: the experience around the ads feels good.”
In addition, a paid subscription service is expected to be launched in the coming months, and this is where you’ll see deals with major artists and labels come into play. “If they are going to get full industry support, there is still some pretty complicated stuff they will have to deal with,” says one industry executive, according to Billboard. “It’s not that I don't think they will get there, but I think they are still a few months away."
SoundCloud’s business model has been controversial so far, drawing the ire of many industry expects and artists alike while maintaining a core following. And while alienating that following with a bunch of new ads is a distinct possibility with the new ad initiative, many are wondering why this kind of business shift hasn’t been enacted before now.