SoundCloud has announced plans to introduce advertising to its service, with users able to collect royalties for the first time.
In an email sent out to users this morning, founder Alex Ljung explains that “We’re laying this foundation by initially inviting a small group of creators to become Premier partners in the On SoundCloud program, enabling them to make money on the platform. Over time we will roll this out across the creator community.”
“To make this possible” Ljung continues, “we’re introducing advertising from select brand partners to SoundCloud. When someone sees or hears an ad, they’re supporting an artist. We will include ads gradually and bring on more advertisers as we grow On SoundCloud.”
Music Week reports that this move is part of a new licensing deal that SoundCloud has signed to various entertainment companies, including publishers Sony/ATV and BMG.
Jeff Toig, the company’s business officer, told The New York Times that most ad revenue will go to the content provider, though he “denied to be more specific”.
The adverts will come courtesy of companies like Red Bull, Jaguar and Comedy Central in conjunction with licensed content, though users will eventually be able to avoid ads in the same way Spotify users can, by signing up for premium accounts.
The first territory to experience the ads will be the US, as SoundCloud are “focused on launching and perfecting the program” in their biggest market, before expanding into other countries. SoundCloud have promised to not put ads on users’ uploads without their “explicit consent” (i.e. the users who have signed up to the On SoundCloud program).
SoundCloud have been in talks with major labels Universal, Warner and Sony for some time now, but no deals have been signed yet. According to various reports, the majors want equity in SoundCloud in exchange for agreeing not to sue the company over copyright infringements on uploads. Twitter were also reportedly in talks to buy SoundCloud, but pulled out.