Red Bull and Jaguar will be among the first five advertisers on SoundCloud, the six-year-old audio platform that began running ads on Thursday as a way to compensate artists and labels.
Other advertisers, including Squarespace, Comedy Central and Sonos, will began running ads as part of Premier, a new invite-only subscription SoundCloud tier that promises to compensate artists and labels. Premier will be added to SoundCloud's two Pro plans, which include six hours of uploads per month for $6 and unlimited uploads for $15. Users get three hours of uploads free per month.
See also: The Beginner's Guide to SoundCloud
About 30 artists and labels are among the initial group of Premier members, including podcast network Earwolf, Funny or Die, Red Bull's SoundSelect and artists Little Simz and Big Gigantic. The three major labels are not part of the plan at this point. Though a report in the New York Times portrays the agreement as a détente between SoundCloud and music labels intended to fend off lawsuits, Jeff Toig, its chief business officer, said that's not the case.
"I think the music industry sees a great opportunity to figure out how to take this really significant platform that now has hundreds of millions of users," he said. "I actually think that the discussions with the industry has been really constructive. It's actually not about the legal stuff."
Advertising will run in five different categories on the site. The first is "native," in which advertisers pay to promote content in the stream. Red Bull ran one such ad on Thursday:
Dan Gerber, head of sales for SoundCloud, said the native ads will be similar to Twitter's Promoted Profiles and Promoted Tweets; they are designed to raise awareness among SoundCloud listeners. Other ad units include:
Audio ads that will run as long as 30 seconds (though users can skip through them in 15 seconds)
Sponsored tracks in which advertisers premiere new songs from artists
Contests in which a brand might offer exposure on the platform for new artists
Display ads, which will appear on mobile when users skip through to the next song (though not every time)
Gerber said the company will be experimenting with all the units and will be careful not to overload listeners with ads. "We're going to have a slow rollout," he added.
The Berlin-based SoundCloud, which reportedly has a valuation in the $700 million range, claims to reach 350 million people a month.
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