It has been promised by SoundCloud (and demanded by rightsholders) for a long time, but a subscription tier for SoundCloud is finally coming.
Leaked documents recently suggested that this was something the service was cracking its knuckles and getting ready to launch; now SoundCloud CTO and co-founder Eric Wahlforss has confirmed it will happen later this year. Except that he stopped short of saying: a) when exactly it would launch; b) what the pricing would be and; c) what the split between rightsholders would be.
The main suggestions are that it would impose two tiers, where a free version would give users access to a capped number of streams and downloads each month but the upsell push would be towards the full and unlimited version (potentially called SoundCloud Full Catalog Subscription Service, a name so clunky they might as well call it Hey You Grab Some Music On The Internet To Push In Your Ears Over Here & Dig Those Hot Rhythms 2.0).
“Labels would make an extra 18 cents each month on each user with the first tier model if the user base is higher than the revenue or sound recording rights, and an extra 80 cents for the full catalog option,” claims Tech Times.
This, of course, is not its first step towards monetisation. It has had its pro (£31.50 a year) and pro unlimited (£67.50 a year) tiers from a while that give creators increased storage and access to deeper user analytics; meanwhile, On SoundCloud, its brand partnership platform, has generated over $2m in payments to affiliated rightsholders since launching last year.
This was, however, seen as small beer by rightsholders who have been watching the service draw in a huge amount of VC funding, with it raising a further $60m in January to give it a valuation of $700m. Some (Universal) have questioned its long-term viability, some (Sony) have started to remove content and others (Warner, Merlin) had struck deals.
Speaking at Midem in June, co-founder Alexander Ljung said, “I think that there is a lot of debate right now on ad-supported versus subscription, but I think we are all doing ourselves a disfavour if we’re framing this discussion as [one against the other]. For me, it’s very clear that it’s a combination of both, and that’s for a few reasons. Firstly, music has an incredible power to connect every person on the planet and part of it is about how you share that experience.”
The challenge for SoundCloud lies in carefully transitioning its users into this paid or limited access model. Its selling point from its launch in 2007 was that its embeddable player meant music could be streamed anywhere on the web as it didn’t require a dedicated client or app. That gave it incredible reach, with 175m unique monthly users at the last count. It has to monetise for two pressing reasons: to appease its many and varied investors; and to ensure that rightsholders and artists continue to upload their music which is the main draw for its growing userbase.
On paper, it is clear what SoundCloud has to do but in execution there is a very real risk that it could strangle the very thing that made it appealing in the first place. If handled badly, this could mean that rightholders get their wish of seeing revenue streams unlocked but from a dwindling audience who have started to move elsewhere online.