SoundCloud introduces ads

Music streaming service SoundCloud is introducing advertising and subscriptions for the first time as it looks to monetise the 350 million people the platform reaches each month.

On SoundCloud
SoundCloud has introduced advertising and a subscription service for content creators.

Red Bull, Sonos, Squarespace, Jaguar and Comedy Central are among the first brands that will place audio/image ads ahead of licensed content from partners including Sony/ATV, comedy site Funny or Die and some independent artists such as GoldLink.

SoundCloud has negotiated licensing deals with those entertainment companies, letting artists and record labels collect royalties from their streams for the first time as part of its new “On SoundCloud” creator partner programme.

On SoundCloud has three tiers: Partner, a free option for beginners sharing their first tracks, who will have access to basic stats about their uploads; Pro Partner, a paid subscription which offers more upload time and advanced tools and stats; and Premier, an invitation-only level that gives creators the opportunity to make money from their tracks through advertising. Revenue is currently only shared when tracks are played in the US.

In a blog post, SoundCloud says: “The introduction of advertising is an important step for creators. Every time you see or hear an ad, an artist gets paid. If you’re in the US, you’ll start to experience occasional ads from our brand partners. We’re bringing ads on gradually. In addition to supporting creators, ads will keep the service free and open for people to listen to SoundCloud.”

While the updates provide SoundCloud with the opportunity to monetise the hundreds of millions of streams it has on the platform and placate record labels looking to gain royalties from their artists’ digital content, introducing advertising runs the risk of alienating users that had opted for SoundCloud over the likes of YouTube and Spotify because it was ad-free.

For now SoundCloud will remain free for listeners, but it is understood the service is exploring the introduction of user subscriptions to allow them to remove ads.

SoundCloud does already generate revenue from fees it charges to its most active users. According to its most recent filings with Companies House in the UK, SoundCloud posted £8m in turnover and £12.4m in operating losses in 2012.

Earlier this year it was reported that Twitter had been interested in acquiring SoundCloud, but the microblogging service was understood to have backed away from the deal after investors voiced concerns about the long-term value of the acquisition.

SoundCloud
A SoundCloud ad on iOS.

Recommended

Knowledge Bank

Comments

    Leave a comment

    Close

    Discover even more as a subscriber

    This article is available for subscribers only.

    Sign up now for your access-all-areas pass.

    If you're an existing paid print subscriber find out how to get access here.

    Subscribers enjoy unlimited access to unrivalled coverage of the biggest issues in marketing, alongside practical advice from the digital experts at Econsultancy.

    With a subscription to Marketing Week Premium you will get full access to:

    > World-renowned columnists

    > Analysis & case studies

    > Exclusive leading-edge insight

    > Carefully curated reports & briefings from Econsultancy

    > Plus, much more including a £300 discount for the Festival of Marketing

    Subscribe now

    Got a question?

    Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

    If you are looking for our Jobs site, please click here

    Subscribers enjoy unlimited access to unrivalled coverage of the biggest issues in marketing, alongside practical advice from the digital experts at Econsultancy.

    With a subscription to Marketing Week Premium you will get full access to:

    > World-renowned columnists

    > Analysis & case studies

    > Exclusive leading-edge insight

    > Carefully curated reports & briefings from Econsultancy

    > Plus, much more including a £300 discount for the Festival of Marketing

    Subscribe now