The audio streaming company has also revealed plans to offer a paid subscription service.
SoundCloud has revealed plans to introduce advertising, with artists and labels to collect royalties for the first time.
The move is part of a new licensing deal SoundCloud has signed with entertainment companies, including music publishers Sony/ATV and BMG. Advertisements from the likes of Red Bull, Jaguar and Comedy Central will run alongside licensed content on the site. SoundCloud’s chief business officer Jeff Toig told The New York Times that most of the ad revenue will go to the content provider, though precise details were not provided. The company also has plans to offer a Spotify-style subscription service, with paying users able to skip ads.
Talks between SoundCloud and major labels (Universal, Sony and Warner) have been ongoing for months, with a deal yet to be signed. The labels have reportedly been after an equity in the company in exchange for agreeing not to sue over copyright infringements. SoundCloud has been a free service for listeners, with the company claiming that 175 million people listen to music on its platform each month. The site has been embraced globally by musicians ranging from bedroom amateurs to pop stars. (Its embeddable audio features in Resident Advisor's news column on an almost daily basis. RA also uses the service to distribute exclusive album streams, live sets from RA events and Exchanges.)
It was recently reported that Twitter was in talks to buy SoundCloud but backed out of a proposed deal.