It looks like the days of the free, unobtrusive SoundCloud stream are coming to an end as a leaked contract with independent music publishers has suggested that the site is looking to introduce paid-subscriptions.
In a move that will make the site increasingly similar to the likes of Spotify and Tidal, the contracts suggest the Swedish-born site is planning a three-tier listening system.
A free option will still be available, albeit with ads and limited content, while the other two tiers will require a monthly fee from users.
An “Additional Subscription Features” account is the first paid option, which will offer users more content without the ads.
The most expensive option is the “Full Catalog Subscription Service” which allows subscribers to access all of SoundCloud’s content with “limited downloads,” according to the leaked contract.
The move is likely a reaction to music labels’ recent complaints regarding SoundCloud royalties. Last month Sony pulled music from the site after a reported breakdown in negotiations over revenue.
Under this new model, as pointed out by TechCrunch, SoundCloud would pay labels based on a percentage of streaming revenue, a percentage of royalties or a per-user fee – whichever is higher. The per-user fee indicated in the contract is $0.18 per month for each person who signs up for “Additional Services” and $0.80 per month for each “Full Catalog” user.
Independent labels would be paid an advance of $350,000 and enter into a “Most Favoured Nation Clause” which would ensure that if SoundCloud agrees to a better deal with a major label, they would also get the same terms.
The leaked contract is unsigned so it’s still yet to be seen whether these changes will be implemented but it at least suggests that a big change is on the horizon soon for the site, and its users.
Check out the leaked contract below.