Popular streaming service SoundCloud has announced that starting today, it will begin incorporating advertising and facilitating royalty collection from artists and labels. SoundCloud has always been a free platform, with an estimated 175 million monthly users, but according to the New York Times, the company has signed a new licensing deal with music publishers Sony/ATV and BMG, and is in talks with leading record companies Sony, Warner, and Universal. Red Bull, Jaguar, and Comedy Central are among the first advertisers whose content will run alongside licensed media on the site. Plans are also in the works to offer a paid subscription service, which would allow premium account users to skip ads in the same model currently offered by Spotify.
According to the NYT, the move is partially a "reaction to industry pressure to license content and produce revenue. It also reflects SoundCloud's complex relationship with record labels, which use the service to promote new releases and even hunt for new talent but have been irritated by their inability to make money from SoundCloud's millions of listeners." Further information on the transition is available here.