Ads come to SoundCloud as music platform says it will pay artists

SoundCloud Premier

SoundCloud is finally about to carry visual and audio advertising, in a bid both to stop losing money and to play nice with the big record labels.

The Berlin-based music-streaming platform announced a new program called On SoundCloud late Wednesday. The program sees the introduction of a new “Premier” tier, which will come with a higher upload limit and the advanced tools of the Pro tier, but will also let artists earn money from the tracks they upload.

Although this will begin with a select group of invited creators, it will eventually be available to all of them. In the early stages, monetization will also only take place when the relevant tracks are played in the U.S., but the idea is to soon offer money for plays in other countries as well.

The money will come from advertising, introduced to the SoundCloud platform for the first time. According to the New York Times, the first ads will only run alongside licensed content, from independent artists but also the labels Sony and BMG, distributors INgrooves and Seed, and Funny or Die. Early advertisers will include Comedy Central, Red Bull and Jaguar.

That doesn’t mean the labels are completely off SoundCloud’s back, as negotiations are complex and still ongoing, but at least the German outfit will have revenues to offer, beyond the subscription fees paid by many creators. SoundCloud may have over $100 million in venture capital, but it had net losses of $20 million in 2012 alone.

Will the ads be too annoying for SoundCloud’s existing audience? The NYT also said SoundCloud would introduce a Spotify-style paid subscription for listeners, which will let them avoid the ads, so it does sound like there’s a risk of crossing the line here. In the early days though, the company is promising ads will only be “occasional”.

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