SoundCloud comes with ads and subscriptions

Streaming audio site SoundCloud has started showing ads in its apps. The company also comes with subscription forms where no advertisements are shown for a fee. The move is the result of a deal with various record labels.

With 175 million monthly listeners, SoundCloud is the second largest platform in the world for listening to music after YouTube. The six-year-old service offers the user a lot of exclusive music material and is used by emerging artists, among others, as a possible springboard to success. However, SoundCloud has struggled to monetize the service, and the service has increasingly been targeted by record labels claiming that no rights were paid. This was mainly caused by the large number of uploads of music files to the service.

In an effort to become profitable, SoundCloud has entered into a licensing deal with a number of record labels. SoundCloud now promises to pay royalties to labels and artists. In addition, the company will show advertisements in its app. In time, the company will also offer subscriptions. Subscribers can then disable the advertisements.

Part of the deal that SoundCloud has made is that the record labels will get a share in the company. The labels have also promised not to sue the streaming audio service for past copyright infringements.

The question is whether Berlin-based SoundCloud can maintain its popularity now that it will start showing advertisements and launching subscription models. Alex Ljung, one of the founders of the audio site, tells The New York Times that he expects his users to accept the ads, partly because they realize that the artists will receive money from now on.