SoundCloud's business model of ad-free audio hosting at no cost at times seemed like it was too good to be true. As it turns out, it probably was.
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According to an in-depth report by The New York Times, SoundCloud is shedding its previous free-for-all format and is taking a more standard approach to content hosting by introducing ads. SoundCloud has also said that it plans to incorporate a subscription method that will allow users to pay to skip those ads, though there is not currently a time frame for this feature to come online. Aside from hopefully putting the SoundCloud ledger in the black, however, the company also plans to use this revenue to pay out royalties to artists and labels, perhaps changing the website's role in the music industry as a whole.
The site is rolling out a new tier system for content creators called On SoundCloud that affects how much music an artist can post on the site and the type of benefits the site offers to their account. The free tier is still available for budding artists and casual users with a content limit of three hours. Users with deeper pockets can upgrade to On SoundCloud Pro which offers six hours of space for $6 per month or unlimited space for $15 per month. This tier also provides accounts with advanced information about the groups of people listening to their tracks.
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The final tier, Premier, is currently invitation-only and includes account management from SoundCloud. Tracks by Premier accounts will be served with audio ads with the permission of the content creator. This tier entitles artists to promotion by the website and a share of their ad revenue. For the launch, revenue will only be made for visits from US computers, but the service will expand in time. Audio ads will not be served with content from free or Pro accounts.
Much like other content hosters like YouTube and Twitch, SoundCloud has found some trouble deadling with users who post copyrighted content from major producers. SoundCloud is currently in negotiations with these companies to reach a licensing deal that benefits all parties. For the full report, you can head over to The New York Times.
