In the midst of the angst surrounding SoundCloud's recent decisions to streamline itself in order to make way for a move towards advertising and monetization, at no point was there any official announcement by the company itself regarding whether or not this was always in the company's business plan. However, in a recent conversation with Music Week, Jeff Toig—SoundCloud's Chief Business Officer—explained in simple detail what the Berlin-based company's model looked like in full. “Building a company takes time and SoundCloud has been built in three phases. Firstly, we wanted to build tools for creators. Secondly, we wanted to help artists build a huge audience through our service. Now we’re taking the third step - enabling creators to make money through the platform.”
As previously reported, SoundCloud is hand-selecting US-based "Premier" users to be the initial revenue earners via the platform, with 20 labels, publishers, podcasters, comedians, media content networks and emerging artists among the earliest-invited adapters. Those confirmed in this initial evolution include publishers Sony/ATV and BMG, distributors INgrooves and Seed, comedy website Funny or Die and a number of independent artists, including Washington, DC-based rapper GoldLink. Toig says that eventually the company wants "all creators to have the opportunity to make money through the platform," which likely means that adjustments to the model are likely to be made along the way. Global expansion of the advertising and monetization model is expected,though there is no timetable that has been placed upon when that will occur.
Of note to consider regarding future moves between Soundcloud and content providers is the expectation that the three major labels, Universal, Sony, and Warner are soon to join as "Premier" users. According to the New York Times, the deals for the major labels include a 3-5% ownership stake in SoundCloud (with an unknown percentage of future revenue, as well as a moratorium on any lawsuits regarding past infringement of copyrights of these labels by SoundCloud users prior to the signing of the agreement).
As the digital and analog universes merge, noting how seamless (or not so seamless) the evolution of what is to come is in development is filled with angst, intrigue and a begrudging acceptance.
