SoundCloud Enters The Subscription Arena

Does SoundCloud want to be more like Spotify or more like Apple Music?

According to a story in The New York Times, the online audio distribution platform would actually like to outdo both, as SoundCloud‘s long-awaited subscription plan — which launched yesterday (March 29) — is coming out of the gate with a wider range of music than is available from either of its (now direct) competitors, as well as offering royalties to artists and their labels.

SoundCloud’s subscription plan, NYT explains, will be offered as a second, optional tier to listeners on top of a free version that provides 100 million songs (many of them directly uploaded by artists or pushed as promotions by record labels). The new subscription version, called SoundCloud Go, will cost $10 a month and include the aforementioned 100 million tunes, as well as 25 million more. Paying subscribers to SoundCloud Go will be able to forgo advertisements and save songs to their phone for offline listening.

The NYT story notes that SoundClound’s subscription plan — currently only available in the United States, although the company plans to expand it around the world this year — is a marked departure from the platform’s original business model at its inception in 2008, when it was regarded as a “YouTube for music,” i.e., a free service whose uploads were largely driven by the individual creators behind each piece of content.

Because none of the music on the original version of SoundCloud (which the company tells NYT counts 175 million regular users) was licensed, the resultant lack of royalties for its producers put the service in ill-standing with artists and labels. The new subscription plan is positioned to amend this conflict, as well as bolster SoundCloud’s own revenue, which previously has been dependent on nominal income generated by hosting fees and advertising.

While NYT views SoundCloud’s size and scope as a potential advantage for the company as it enters the subscription plan arena, the outlet points out that it’s not only the aforementioned Spotify and Apple Music that SoundCloud Go now has to contend with as competitors but also Tidal, Rhapsody and the streaming (and wide audience-reaching) services of YouTube, Amazon and SiriusXM.