March 28, 2016 Vince Valholla

Soundcloud is introducing a new paid tier, will this alienate its users?

Photo Credit: Remie Geoffroi
On March 18, Soundcloud announced a licensing agreement with Sony Music that set the stage for it’s streaming subscription service. It’s going to include a “paid tier” along with a free option that exists already. Licensing agreements have already been made with Universal Music Group, Warner Music Group and Merlin, an independent label agency. As an independent label owner, this is great news. For over a year, I thought the idea of having full albums on Soundcloud was a waste. Yes, the discovery aspect is amazing but, Soundcloud streams don’t count towards album sales and if you’re not with Merlin, or signed to a major, you’re not getting paid for those streams.

Soundcloud has over 175 million users and if only a small percentage of those users pay for the service, they can be a major player in the streaming, but how many people will continue to use it for free? My guess is, people will feel like Soundcloud “sold out” and possibly stop using the service. My hope is that Soundcloud plays can eventually count towards album sales (But people can buy streams so let’s see how that goes). Here’s an excerpt from Billboard on how the new service will work, “[Soundcloud] will allow the major labels to decide which of its songs are available for free — a degree of control the labels want, but haven’t been able to get from Spotify. The SoundCloud agreement gives us the opportunity, with our artists, to have flexibility with respect to how we make music available to fans, Universal Music Group ­chairman/CEO Lucian Grainge told Billboard in January.”

This is overall a great move. Tell me your thoughts about this. Will you continue using Soundcloud? Tweet me @VinceValholla

UPDATE: Soundcloud’s new subscription service, “Go” is now available in the US for $9.99 a month with a 30 day trial. Will you be trying it out?
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Vince Valholla

Vince Valholla is Chairman/Chief Executive of Valholla Entertainment, Inc. Valholla is a full service Music Label & Management Company based in Miami, FL. Valholla's 2015 release of Kirby Maurier's "Doing The Most" was one of the highest selling independent R&B albums in the South Atlantic Region. His opinion is his own.