According to The New York Times, Soundcloud has launched advertising on its streams, and has plans to introduce an advertisement-free paid subscription in the "coming months".
With 175 million unique listeners monthly, Soundcloud is the second largest music streaming service in the world behind YouTube, and this is the first step it has taken towards advertising.
The new ad platform, On Soundcloud, will launch with a carefully selected group of partners (advertisers and creators) in the US only, to begin with. Advertising will be shown or played alongside the audio, with the creator receiving "the majority" of the money paid by the advertiser.
Speaking to The Guardian, Soundcloud chief executive Alexander Ljung explained: "We see the program as something for all creators. We're launching with a small set, but ultimately we want to get all creators, whether music or audio, big or small, all over the world to be able to make use of it."
Soundcloud will also be paying artists and record labels royalties. Whilst some labels are negotiating for equity stakes in the company, in exchange for not suing the streaming service over previous copyright infringements.