soundcloud-2014

SoundCloud to Introduce Ads, Pay Artists & Labels

Everyone’s favorite ad-free streaming platform is about to go commercial. SoundCloud has always allowed its users to upload and stream any kind of audio, and many musicians have taken to the platform to share their newest music. Around 175 million people stream content on SoundCloud each month, which is more than four times Spotify’s global audience. Up until now, SoundCloud hasn’t had audio ads, but starting Thursday the company will enact a new licensing deal with entertainment companies that will incorporate advertising, allowing artists and record labels to collect royalties.

SoundCloud also plans to eventually introduce a paid subscription that will allow listeners to skip ads, similar to how it works on Spotify and other licensed services. Major labels and independents are negotiating with SoundCloud for equity stakes in the company, on the basis of agreeing not to sue SoundCloud over past copyright infringements. While Twitter ultimately decided against acquiring SoundCloud earlier this year, with these moves SoundCloud is set to become a lucrative acquisition candidate.

The folks at SoundCloud may be excited about monetizing their platform, but many artists are critical of how it has handled copyright notices. Takedowns have increased dramatically recently, and some artists feel as though SoundCloud is not treating its content makers with respect.

The first advertisers include Red Bull, Jaguar, and Comedy Central, whose ads will only run in conjunction with licensed content. Initial content partners include Sony/ATV and BMG, the distributors INgrooves and Seed, the comedy site Funny or Die, and a number of independent artists, including GoldLink.

Universal, Sony, and Warner still have not completed licensing deals, and part of the reason is that there’s so much content on SoundCloud that’s difficult to determine appropriate licensing terms for. It’s still unclear how revenue generated by material such as DJ mixes, mash-ups, and remixes is to be split among the respective content owners.

You can check SoundCloud’s FAQ on ads here.

[h/t New York Times]

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