SoundCloud may be a paid service within nine months
According to sources at Digital Music News, SoundCloud may launch a paid subscription service by October this year. The online streaming service currently is free to all users, though the company introduced audio ads in August 2014. The speculation is corroborated by the March 7 hiring of Allison Moore, former Chief Revenue Officer of NBC Universal, who has been vocal about prioritizing a subscription-based rollout. Like SoundCloud, NBC Universal has struggled monetizing their service in the digital era, and Moore brings experience in acquiring paid users.
While SoundCloud has 175 million active users around the world, the large majority of them are using the platform for free. As the user base has increased, the company has been hit with near-constant troubles from other music industry players and users alike. The lawsuit-plagued company took a step towards legitimacy when it finally inked a deal in January with Universal Music, granting SoundCloud licensing rights to the major label’s catalog. One of the stipulations to the purportedly one-year agreement, however, is that SoundCloud launch a functional subscription-based tier — a provision that looks to be actualized in the near future.
The deal allegedly called for a so-called “subscription-based 1.0” to be functional by July — an admittedly ambitious timetable — though it is expected that Universal will offer grace periods if SoundCloud has made tangible progress in building infrastructure for the platform.
Moore begins her tenure with the gargantuan development and looming deadline staring her in the face. Internal auditors hope that her onboarding will also reverse startling levels of cash burn — SoundCloud, for instance, reported annual losses of $56.4 million after FY 2014. With a tumultuous recent history on the books, Moore may prove the necessary force in finally steering the company to surer waters.
Via: Digital Music News