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Digital Audio Programmatic

SoundCloud steps up monetisation drive with premium offering, plus advertiser charm offensive


By Ronan Shields, Digital Editor

May 3, 2016 | 4 min read

Competition in the digital audio sector is ratcheting up, with some of the biggest names in the sector revealing major monetisation drives in the latest 12 months. The Drum takes a look at SoundCloud’s latest efforts.

SoundCloud has today (3 May) revealed its premium service SoundCloud Go, as well as a major initiative to help advertisers in the UK and Ireland engage with its “taster maker” audience.

The music streaming service’s subscription service, SoundCloud Go, will cost consumers £9.99 per month – after a free 30-day trial. The launch of the service coincides with the launch of a range of advertising offerings that will support its existing free service.

The latter part of the monetisation drive involves an agreement with the Global Radio-led Digital Audio Exchange (Dax) that will see SoundCloud make its inventory available to media buyers via the UK-based advertising network for direct sales, plus those using automated – or programmatic - technologies.

As the first partnership of its type for SoundCloud in EMEA, Dax will exclusively sell interstitials, as well as audio advertising across all SoundCloud’s web and mobile properties, as from today. SoundCloud’s free service will be supported by audio advertising, mobile interstitials, as well as promoted tracks, creator partnerships.

The first brand advertisers are named as Squarespace and TuneCore, an extension of already existing deals in the US (the music streaming service’s free-to-consumer offering has been ad supported since 2014).

Responsibility for native partnerships - the likes of which have seen UK artists Sizzlebird team up with Jaguar to produce the track ‘Leaves’ - will remain in house at SoundCloud.

To help facilitate the rollout of its monetisation drive SoundCloud has bolstered its sales team in recent months, hiring ex-Capital FM executive David Couch as head of sales, whose tasks involve managing brand partnerships and ad sales across the British Isles.

Facilitating brands’ interaction with ‘taste makers’

Speaking with The Drum, Alison Moore, SoundCloud’s first chief revenue officer, said the music streaming service intends to strike a balance in its monetisation strategy between premium subscription revenue, as well as by facilitating brands’ engagement with its unique audience.

“Since 2008, SoundCloud has been the destination for emerging artists, and we now have 12 million creators globally, with 175 million users, the new service will give them 125 million tracks at their finger-tips globally.”

Among the key differences between SoundCloud’s audience, and that of Pandora or Spotify, is that DJ’s, musicians, and other “influencers”, play such a key role in its community, according to Moore. “SoundCloud is a differentiated experience and audience,” she said.

“This is an audience that is unduplicated by Pandora or Spotify,” she said. “It’s one that is deeply millennial, and highly mobile engaged.”

Moore, who joined SoundCloud in the first quarter of this year, also explained how the music streaming service intends to further its audience in more-and-more sophisticated means.

This includes ambitions to help advertisers reach its unique audience on third-party web properties – a method often referred to as ‘audience extension’ – which will require it to become both a buyer and seller of media.

Further ‘artist activation’ plans

As a means of preserving this highly valuable - and indeed unique proposition, according to Moore – SoundCloud intends to raise its efforts to ensure that the music streaming service is a rewarding one for ‘creators’ (arguably its most valuable asset).

From later this year SoundCloud will begin making further efforts to help artists using the music streaming service to monetise their content, according to Moore, who described this as “artist activation”.

For instance, SoundCloud was able to facilitate a deal between Microsoft and DJ Jacques Greene, whereby the IT behemoth sponsored a remix recording from the artists that was exclusive to the music streaming.

“We’ll be building out more emerging artists monetisation opportunities,” explained Moore.

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