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Summary:

The YouTube of sound is a clear success, but its big monetization play – beyond pro-account subscriptions – still remains a mystery.

soundcloudfounders

UPDATED: Although it’s probably best-known as a music platform, SoundCloud has a fast-growing business in other kinds of audio too, from weird field recordings to the spoken word. There are all kinds of sounds in there.

And now that repository is about to pay off for some of SoundCloud’s 20 million users. SoundCloud has just signed a deal with Getty Images that will make it possible for those users to license their sounds to anyone who’s willing to pay – most likely advertisers and other creatives. (Hear more about the future of SoundCloud from CEO Alex Ljung at our RoadMap conference on November 5th in San Francisco).

“SoundCloud’s partnership with Getty Images Music creates a powerful offering to our community of professional and casual creators,” Ljung said in a statement. “Now through Getty Images Music, songwriters and audio creators can broaden their exposure and potentially monetize sounds they’ve shared on SoundCloud.”

The system will be quite straightforward: each user will be able to install a ‘license’ button from Getty Images Music on their SoundCloud players, for tracks that they want to monetize. Those who want to license the track just click the button and send a request.

Beyond that, depending on how much contact information the SoundCloud user has provided, and whether or not they’ve already sent a tax form to Getty, it will take between a few days and a few weeks for the track to become available.

Getty’s rate card details how usage in web or mobile advertising will cost $350, inclusion in corporate marketing will cost $1500, and so on. The creator gets “35 percent of the upfront licensee fee plus 50 percent of Getty Images’ share, as publisher, of any backend performance royalties”.

And what if the user’s sounds get used in something that’s broadcast? Depending on what type of licensing that’s been chosen by the user, Getty registers the track with performing rights organizations and administers the royalties – 100 percent of the ‘writer’s share’ goes to the creator, along with 50 percent of the ‘publishing share’.

Funnily enough, I’d noted before that Getty was sniffing around the Berlin scene, but I’d assumed that the fruits of that interest would be seen first in a collaboration with an image-centric service, probably EyeEm.

SoundCloud is the pioneer and leader in what it does, i.e. being a YouTube for audio. It’s wildly popular, but its monetization strategies appear limited. Audio-player deals and those pro-account subscriptions can only take the firm so far.

Unfortunately, this is still not a new monetization strategy. SoundCloud doesn’t take a cut, nor does it require users to be paid-up members in order to take advantage of the licensing service.

That means it remains possible that SoundCloud will adopt audio advertising, which is something I feel would drive away many users – particularly as SoundCloud does not tend to offer the same kind of continuous listening experience found in the likes of Spotify.

UPDATE: I originally got the wrong end of the stick regarding SoundCloud taking a cut of the licensing fees. To misquote Obi-Wan, this was not the monetization strategy I was looking for.

  1. Except, SoundCloud isn’t taking a cut. This, as I understand it, is just a value-add to sell more premium subscriptions.

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    1. Thanks – you are right. I assumed where I shouldn’t have assumed. That said, I fail to see how this will drive premium subscriptions, as those aren’t required in order to use the licensing service.

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      1. Well, it doesn’t in the direct sense. But it’s another reason why SoundCloud is the default platform to use if you are serious about producing original sound/tracks semi-professionsly or professionally.

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  2. I neve thought about it like that before dude.

    http://www.VPN-Network.tk

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  3. SoundCloud’s monetization is premium accounts. They have a 120 minute limit on free accounts, only double the limit on the first tier of premium, and then they get really expensive.

    SoundCloud unlimited account = £500/year
    Youtube unlimited account = free

    They can claim to be the Youtube of audio all they like, but they are not. 120 minutes is tiny if you regularly create content. I think they are doomed in the long run with this model.

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  4. are these tracks exclusive?

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  5. Here’s a quote from the FAQ: “[,,,]but in any case you will receive 35% of the upfront licensee fee plus 50% of Getty Images’ share, as publisher, of any backend performance royalties.” 35%!? What a deal! Here Getty, I created this music, PLEASE make more of a profit off of it than I do. You deserve it! It was far harder for you to make a button on a website than for me to create something from nothing. Writing code is way harder than playing an instrument; I’ve just been bullshitting for a decade and a half!

    It’s a terrible deal for artists.

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  6. This is a great step in the right direction, but I would have to really read thru their TOS. I would be on the lookout for things regarding “exclusivity” and “perpetuity” .. Typical publishing deals are 20/20… Simply making something part of your library should not entitle you to a full 50% share.

    Of course this is just a cursory feeling from having read the article, and not the full details.

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  7. This is a great step in the right direction, but I would have to really read thru their TOS. I would be on the lookout for things regarding “exclusivity” and “perpetuity” .. Typical publishing deals are 20/20… Simply making something part of your library should not entitle you to a full 50% share.

    Of course this is just a cursory impression from having read the article, and not the full details.
    If I decide to take them up on it, I’ll comb through it. Publishing is the business end of the music biz right now; definitely not lending itself (from what I’ve seen so far) to push-button simplicity.

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  8. After reading this post I was eager to learn more about soundcloud and getty then I ran into these 2 videos (one was just released today)

    Video 1 http://www.youtube.com/watch?v=ONEOuJYw9gM
    Video 2 http://www.youtube.com/watch?v=4AI5s0Dhy98

    It doesn’t seem like a bad idea. i went to the soundcloud site and a lot of the members there are bashing getty… why is this?

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