SoundCloud amps up ways for artists to get paid. The price? Ads

The "YouTube for audio" is the latest streaming-music site to tout new ways artists can commercialize. Of course, for its 175 million monthly listeners, that means commercials.

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SoundCloud

SoundCloud listeners, get ready to hear something new: advertising.

The "YouTube for audio" joined a fast-growing list of streaming-music companies parading new ways for artists to get paid through their platforms, but it's adding more commercials to do so.

The Berlin-based music and audio-sharing company introduced a tier called Premier to its free and paid options, which will make it possible for uploaders to make money from the tracks they share, according to a blog post from founder and Chief Executive Alex Ljung late Wednesday. To make revenue to hand over to artists, SoundCloud is introducing "occasional ads," the company said.

Among the new ads are 30-second audio spots that will run before a track starts to play, and listeners have the choice 15 seconds into it to skip the rest. They will run only with files that the creator has opted to start monetizing through the program.

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SoundCloud is introducing more commercials, like this 30-second audio ad. SoundCloud

Because of the creator-opt-in nature of those spots, how many ads you hear will vary. "Some users might bump into content that's in the program and have an ad, and some users may not," Chief Business Officer Jeff Toig said in an interview.

The new tier -- part of SoundCloud's artist-partnership program "On SoundCloud" -- is invite-only and limited to the US at launch, but SoundCloud's goal is to ultimately allow any creator who wants to participate to join, Toig added. The program is also free for artists to join and participate, but it comes with "the opportunity and the expectation" that creators will choose some or all of their uploaded content to run with ads, he said. He wouldn't specify how big a cut of the advertising revenue artists get but characterized it as a majority of the money.

SoundCloud, which lets anyone upload and listen to audio files, has 175 million unique listeners a month and hit its 250 millionth user milestone late last year. By comparison, US-based Pandora -- the Internet's biggest online radio service -- had 76.4 million active listeners at the end of June and also has more than 250 million registered users.

Up until recently, 7-year-old SoundCloud had relied on a "freemium" model to make money. A free tier let anyone upload and listen to audio files on the site, while a small set of users paid for a higher level of service with added features and benefits, which brought in the cash. In October, the company began its flirtation with advertising by introducing "native ads," which essentially stuck a visual commercial next to SoundCloud's audio player.

It's the latest in a series of streaming-music sites to unveil ways for artists to monetize through their platforms. In the last month, Pandora introduced its first-ever direct deals with independent labels, and Smule, a music gaming company, created a dedicated program to develop promotional campaigns with artists, such as arranging a duet between fans and artist through its Sing! Karaoke app. Last week, Spotify and Bandpage joined forces to let musicians sell "experiences" to fans on the streaming service, such as private concerts, duets, and pre-show parties.

Streaming music has grown to become the music industry's biggest area of sales growth in just a few years, but it has been plagued by questions -- sometimes outright accusations by high-profile musicians -- about royalty and payment structures that rip off artists.

Update, 7:21 a.m. PT: Adds details on the ads listeners will hear.

 

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