SoundCloud users who can’t wait to get those new ads out of their streams will have to hang on until next year for a commercial-free version.
Alexander Ljung, the streaming music site’s CEO, told the Wall Street Journal that an ad-free subscription service will launch in the first half of 2015. SoundCloud first revealed its subscription plans in August, after it started rolling out audio and display advertising for all users.
The subscription service is guaranteed as part of a licensing deal with Warner Music Group, the Journal reports. SoundCloud will pay royalties to Warner and its publishing division any time users play one of the label’s songs on either the ad-free or ad-supported version. Warner will also get some equity in the company.
In exchange, SoundCloud will be able to host Warner’s music on the site without fear of takedown requests or legal repercussions. Previous reports have claimed that SoundCloud is looking to make similar deals with other labels.
It’s unclear exactly what the subscription service will look like, but chances are it’ll be different from existing on-demand services such as Spotify and Rdio. SoundCloud is best known for undiscovered artists, remixes of popular songs and unreleased material from established acts, and Warner isn’t even required to license its entire catalog. The Journal notes that SoundCloud may offer several subscription tiers at different prices, but the free version isn’t going away—as long as you are okay with ads, of course.
Why this matters: As Bloomberg Businessweek notes, it’s a bit strange that labels have given SoundCloud this much slack in coming up with a business model, especially given how aggressively they’ve attacked other infringing services. But again, SoundCloud isn’t a traditional on-demand streaming service. It’s hosting plenty of new and remixed content that doesn’t exist elsewhere, and has the chance to be complementary to services like Spotify, rather than another me-too offering. Combined with the fact that SoundCloud has 175 million monthly active users—more than Spotify and Pandora put together—the labels may be a little more willing to let this one play out.