The streaming platform is to incorporate a range of new features in order to pay artists and labels royalties for the first time.
Claiming to host 175 million users each month, SoundCloud is amongst the largest plaforms of its kind. Hitherto it had served as a means to upload and listen to any kind of music – entirely free of charge. The widespread distribution of copyrighted material had been a source of annoyance for many major labels, a fact that goes some way to explaining this latest development.
As part of licensing agreement signed with entertainment companies such as Sony/ATV and BMG, adverts will now run alongside copyrighted material – much like on YouTube or the free version of Spotify. The majority of the revenue from these adverts, by the likes of Red Bull, Jaguar and Comedy Central, will then be given to the providers of the content which they feature next to – although exact details have yet to be provided. The introduction of adverts also coincides with the imminent launch of a subscription service a-la Spotify, which will allow users to listen to music ad-free.
Despite the aforementioned agreement with Sony/ATV and BMG, a deal has yet to have been struck between SoundCloud and Sony’s label as well as majors Universal and Warner. Meanwhile the founder of SoundCloud Alex Ljung (seen below) has tried to allay the fears of the site’s users following this announcement. Speaking with The New York Times, Ljung said “..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.”