Rumors have been flying about SoundCloud’s forthcoming subscription service since last summer, but a new deal with Sony Music Entertainment has cinched it, says The Verge. This latest agreement gives SoundCloud deals with all three major labels – Sony, Universal and Warner. SoundCloud had previously signed deals with Universal in January and with Warner in November 2014.
“Having deals in place with all three major music labels means we can continue to build a unique platform and empower our community of more than 18 million artists to share their work and connect directly with their fans. It also means listeners will have even more excellent music and audio to discover,” said SoundCloud in its blog announcing the Sony deal.
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According to Billboard, SoundCloud previously had an agreement with Sony, but in May 2015, Sony pulled music from SoundCloud pages because there was no way to monetize the content.
So what will the new subscription look like? The Verge reported the company will charge $10 a month for the subscription service, and may offer a mid-tier service at a lower price point. In terms of cost, SoundCloud will compete against Apple Music at $9.99 a month, Spotify at $9.99 a month, Tidal at $9.99 or $19.99 a month, and Pandora at $3.99 a month.
SoundCloud currently has subscription services – Pro and Pro Unlimited – for its artists to share their music with their fans. The Pro service is $7 a month, doubles upload time, provides additional stats and allows artists to pin tracks and playlists to the top of their SoundCloud profiles. At $15 a month, SoundCloud’s Pro Unlimited service allows artists to upload without limits, see which cities listeners are listening from and see the web pages and apps their users are using.
Is there room in the streaming music market for another player? What will it take for SoundCloud to succeed? The streaming music market is a volatile place right now, with smaller players like Rdio getting absorbed by larger ones like Pandora who acquired the company in 2015. There are also legal issues with licensing and royalty payments which have drawn Spotify and Tidal both into class action lawsuits recently.
Legal issues aside, the key to SoundCloud’s success will be differentiating itself from similar services with similar price points, making more money than it spends on content and subscriber acquisition, and converting its free users to paid ones. SoundCloud has a large user base, and it offers features to artists, so it has the potential to be successful, but there are no guarantees. We’ll keep an eye – and an ear – on SoundCloud and let you know once details of the new subscription service are announced.
~ Dana E. Neuts, Subscription Insider