I use SoundCloud daily for music I can't find anywhere else. I'm amazed they haven't tried harder to make people like me pay for the service. I would pay if I hit a paywall at some point of usage.
The problem is that they couldn't get away with it. Most of the stuff I listen to on SoundCloud is available on other platforms which are free and run by companies that can afford to take a loss (YouTube) or on services I already pay for (Spotify, DI.fm).
I'm also greatly disappointed that they seem to have settled on 128kbit MP3 as the peak of quality.
The reason that they couldn't do this faster is that until recently they were not in a legal position to ask for payment because they hadn't negotiated a deal with the organisations who collect royalties on behalf of songwriters - and it is important to understand that a songwriter isn't always the same person as the recording copyright owner and sometimes neither of those people are the artist, and in the early days particularly sometimes none of those people was the person uploading the music to SoundCloud. Legally making music available to stream is legally complex.
So they were in a bit of a chicken and egg situation - they needed to monetise the service but couldn't because they weren't legally able to, and to compound this they were sitting on a liability because technically they had been infringing the copyright of songwriters - but to do a deal to be legally able to monetise they had to be able to generate some sort of revenue stream to be able to get forward investment to settle the terms of that negotiation.
TL;DR - Soundcloud couldn't charge people without potentially being sued at some point about a copyright issue. To be able to charge people they needed to settle that problem and it seems like that all went on too long and now maybe they've hit a point where the model for monetising soundcloud isn't working as fast as they hoped.
I feel like SoundCloud (and similar indie music services) could really benefit from a microtransaction-based model. I don't want to pay SoundCloud $10/month for what they offer, because a competitor is fulfilling an aspect of that offering for me already and doing a better job of it, but I'd be keen on paying them something for what their competitor doesn't offer.
Essentially I want to pay them something to be able to listen to SoundCloud's uploaded tracks on my phone offline. That's it! Until they can compete with Spotify on a technical front and make me switch, I can't justify the $10/month, but I can certainly justify paying less for a sliver of that offering.
There are ads like every 3 songs on mobile. That would make someone like me either pay for their $4.99 service, (which I didn't even realize existed until recently because they only seem to advertise their $9.99 service) or use something else.
The ads are mostly regionally targeted/restricted so users might not see them if they have the right IP. E.g. in Canada and France I can't recall hearing an ad but they spammed me in the US until I finally paid.
I don't think they have ads in all countries. I live in Norway and have not heard a single ad. When I was in the UK a couple of months ago, I received ads.
