Long touted as a rival to SoundCloud, Mixcloud uses audio fingerprinting technology to identify underlying tracks in shows on the platform, then pays royalty fees to the relevant rightsholders. It has signed direct licensing deals with Universal Music Group, Warner Music and Merlin Network.
But "since we started building this platform, the royalty costs for every person who listens for free have steadily risen," the founders write. "Today, the revenue that we make from advertising simply doesn’t come close to covering these costs."
Free listeners will still have access to Mixcloud's catalog of more than 15 million shows, but may now run into some new restrictions. They'll only be able to seek forwards -- not backward -- while listening to shows, won't be able to listen to the same show more than three times in a two-week window, and won't be able to listen to shows featuring more than four tracks by the same artist or more than three tracks from an album.
The new Mixcloud Premium subscription allows users to avoid all those restrictions for $7.99 a month. According to the letter, 70 percent of revenue from Premium subscriptions goes straight to artists and songwriters, while Mixcloud pockets 25 percent, using the remaining 5 percent to cover transaction fees.
Somewhere in the middle is Mixcloud Select, which allows users to subscribe directly to an individual creator for a flexible monthly price set by the creator from $2.99. That option -- originally introduced last December -- gives the user access to their channel of choice without limits, and "exclusive rewards" in turn. The payout here is a little more complex: Of the roughly 30 percent in revenue that isn't going toward artists and songwriters or transaction fees, 60 percent goes directly to the select creator, and 40 percent goes to Mixcloud.
Free listeners in the U.S. should already be familiar with the changes, but all this will be news to users in other parts of the world.
"We understand that you may be frustrated -- or perhaps you won’t even notice," Mixcloud's founders add. "Your subscription to either Select or Premium will help keep this global community for audio culture thriving."