Audio-streaming platform Mixcloud is introducing a new service-wide ‘Premium’ subscription, which will cost $7.99 a month and enable listeners to “access all public shows across the platform without limits”.
Wait, what limits? Ah, that’s the other part of the company’s announcement this morning…
Mixcloud grew as a platform for DJ mixes, podcasts and other radio-style shows, using an ‘interactive radio’ blanket licence to pay royalties to rightsholders for music used in that content. There were rules covering what could and couldn’t be uploaded in mixes, but listening was free.
“In the coming months, this free playback streaming experience on Mixcloud will become slightly more limited. It’s important to us that, as a member of our community, you understand why,” explains a blog post from Mixcloud’s co-founders this morning.
“The short answer is: so that we can keep up with the costs of running a streaming service that puts artists and creators at its core, and so we can build a sustainable platform that will be here for you in the long term.”
Those new limits? Free users will only be able to seek forwards when listening to a show, but not backwards; they’ll only be able to listen to the same show up to three times in a ‘rolling two-week window’; and they won’t be able to listen to shows that feature more than four tracks by the same artist, or more than three tracks from an album.
(These limits are already in place in the US, but in other parts of the world, they’re new for Mixcloud users. And in truth, the ‘slightly more limited’ description is fair: these aren’t draconian limits by any stretch of the imagination.)
The new Mixcloud Premium subscription will remove those limits. Meanwhile, anyone using the existing ‘Mixcloud Select’ subscription, which launched in December 2018 as a way to subscribe to individual creators/channels from $2.99 a month, will also have the limits removed for that channel.
The roots for today’s changes come in the direct licensing deals that Mixcloud signed in 2017 and 2018 with major labels, and the costs of implementing audio-fingerprinting tech to identify copyrighted tracks so that royalties can be paid. Mixcloud also raised $11.5m of funding in April 2018 – the first ever funding round for the company, which had previously been bootstrapped.
“Since we started building this platform, the royalty costs we pay for every person who listens for free have steadily risen. Today, the revenue that we make from advertising simply doesn’t come close to covering these costs,” explained Mixcloud’s blog post, which is aimed at listeners.
“If you, like us, want to see this platform continue to exist for the next decade, then we need more people to subscribe to their favourite channels with Mixcloud Select or upgrade to the new platform-wide Mixcloud Premium plan.”
The company added that 70% of the revenues from the Premium plan will be paid out to rightsholders for artists and songwriters; with 5% reserved for transaction fees, and Mixcloud taking a 25% cut. In the case of Select, 65% goes to rightsholders; 5% to transaction fees; 18% to the owner of the channel that’s being subscribed to; and 12% to Mixcloud.
Two takeaways from this announcement. First, there is potential for a backlash from listeners, something Mixcloud’s founders referred to explicitly in their post (“we understand that you may be frustrated – or perhaps you won’t even notice…”)
Second, the company is being pretty upfront about the challenges of making Mixcloud sustainable as a business. Having built a strong community of listeners and creators, it will be hoping that being open about this struggle will rally that community behind it – by stumping up for subscriptions – and thus neutralise any frustrations at the limits.
We’ll await the reaction from listeners and creators alike today to the news. The last figure Music Ally had on Mixcloud’s audience was in October 2017, when co-founder Nico Perez told us that it had 17 million monthly listeners: 10 million on its own site and app, and another seven million via its embeddable player on other sites.