SoundCloud to Incorporate Ads, but They’ll Pay Royalties to Artists Too

The popular social sound platform is planning to introduce advertising and pay out royalties to artists.

August 22, 2014

Remember life before SoundCloud? No, neither can we. Simple, sleek and free, it became the default artist homepage almost overnight, leaving Myspace just a distant memory. Now it looks like the honeymoon might be over, sort of. The New York Times reported on Thursday that SoundCloud is planning to go the way of Facebook and Twitter and incorporate advertisements on the site, although in the future users may be able to sign up to a paid subscription to bypass ads. On the flipside, thanks to a new licensing deal with entertainment companies, artists and labels will for the first time be able to collect royalties for their tracks hosted on the site. 

This news will no doubt be of interest to the labels who are in talks with SoundCloud for equity stakes in return for not suing them over earlier breach of copyright. As Pitchfork reported, there has not been any official deals with the three major music conglomerates (Sony, Universal and Warner) however.

Also on Thursday, the company announced On SoundCloud, a new creators program divided into three tiers: the Partner level, which is a free service for the beginner; the Pro Partner level that will allow users to upload content faster and offers advanced tools for a fee; and the Premiere level, an invitation-only level in which users will be able to make money from their music through advertising. 

As for whether its users will embrace the upcoming changes to the site, SoundCloud co-founder Alex Ljung told The Times: “People know that SoundCloud is very much a creator platform. They understand that if they hear an ad, then a creator is getting paid for it as well.” Just like the recent Merlin-Pandora partnership, all being well this could be another promising move to finally land some dollars in the pocket of the indie musician.

Posted:
SoundCloud to Incorporate Ads, but They’ll Pay Royalties to Artists Too