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SoundCloud has a new service that’s taking Spotify head on

·West Coast Correspondent

SoundCloud was the one streaming service that users could count on for free tunes. Until now.

The music streaming platform on Tuesday announced it is launching a paid subscription service, SoundCloud Go, in the U.S. and will launch globally later this year. The service costs $9.99 per month for Android and web users and $12.99 for Apple iOS users, with a free 30-day trial.

The move isn’t exactly a surprise, considering CEO Alexander Ljung had long said that a paid model would arrive sometime this year.

SoundCloud boasts that it has distinguished itself in a crowded field as a tool that unearths breakthrough tracks, raw demos and podcasts. The service will be similar to Spotify’s setup, which has a free component as well as Spotify Premium, where users pay $10 a month for ad-free streaming. Note that the price is the same, suggesting that SoundCloud trying to take its rival head on.  

Since launching its advertising program in August 2014, SoundCloud has been on a mission to become profitable. Earlier this month, the company hired former NBC executive Alison Moore as its first ever chief revenue officer who appears to have gotten the ball rolling with this launch. The company said she is responsible for overseeing and executing the subscription products in addition to marketing and ad strategy globally.

With the streaming market so saturated -- in addition to Spotify, competition also includes Apple Music, Pandora (P) and Jay Z's Tidal -- the issue for consumers is why you would need, or rather want, to listen to music on overlapping platforms.

Though the company says the free service will continue to be a core part of the platform and that the subscription service is a complement to the existing platform, a peek into Pandora may be an indicator of the difficulties of garnering interest in a premium model.

Pandora reported 81.1 million active listeners last quarter, down slightly from 81.5 million a year ago. Pandora has its own ad-free model, “Pandora One,” which costs $4.99 per month, but only 5% of its users pay for the service, perhaps because Pandora’s playlists are algorithmically curated in the first place.

Meanwhile, Apple Music has about 11 million users and Tidal has 1 million. But it’s clear that Spotify, which has 100 million monthly users (30 million are Premium members), is the service to beat.

The question remains how many of SoundCloud’s 175 million monthly listeners will be willing to front the bill for access to the “full repertoire of artists signed to independent labels and major labels like Sony Music, Universal Music Group and Warner Music Group."

SoundCloud will continue to bet big on its remixes as it tries to stay afloat in such a cacophonous, and increasingly pricey, landscape.