SoundCloud revamps its subscription service with cheaper $4.99 option

SoundCloud has rebooted its paid membership plan with a new budget option less than a year after it launched.

The Berlin-based company today revealed a cheaper tier of $4.99 per month, down from the initial $9.99 subscription that it rolled out last March, in a bid to make its plans more appealing to users. The company isn’t abandoning that higher pricing, though, and it will offer both $4.99 and $9.99 packages, known as SoundCloud Go and SoundCloud Go+, respectively.

The cheaper option gives users full ad-free access to over 120 million tracks, with the option of saving offline on mobile. SoundCloud Go+, by contrast, includes access to a wider selection of 150 million songs and no previews. It isn’t clear which tracks will be unavailable via the cheaper deal, but to sweeten things a little more, SoundCloud Go+ will include “additional exclusive product features” that’ll be announced later this year, according to the company.

The dual package approach is one that makes plenty of sense, and probably what the company should have plumped for initially. For one thing it undercuts Apple Music and Spotify on pricing — they are at $9.99 a month —  but also SoundCloud has struggled to convert its popular service, which counts some 175 million users, into subscriptions and, in turn, much-needed revenue. Indeed, the company confirmed to the Financial Times in January that it is in discussions to raise new funding, having most recently raised $70 million from Twitter at a $700 million valuation last summer.

2016 was quite the year for the company. After an ongoing will-they-won’t-they acquisition saga with Spotify finally broke down in December over Spotify’s IPO concerns, SoundCloud embarked on a series of strategic moves. It turned on programmatic advertising in the U.S. to double down on ad revenue, shuffled its team with a new CTO, and today’s news looks like another gambit to shore up the longterm viability of its business.

“By expanding our offering, we not only enhance the experience for listeners on the platform, but also unlock new revenue opportunities to further expand our creator-payout program,” CEO Alex Ljung acknowledged in a statement.

SoundCloud is, of course, up against tough competition in the likes of Spotify, Apple Music and Pandora in the online music space. Spotify claims to have over 40 million paying users — it hit 100 million registered users last year — while Apple Music reached 20 million paying subscribers in December. SoundCloud, meanwhile, has never provided a figure for its paying userbase.

SoundCloud Go and SoundCloud Go+ are available in the U.S., UK, Ireland, France, Australia, New Zealand, Canada and Germany.