A premier track is a track uploaded and owned by a SoundCloud member who is part of the premier program. It can be monetised (ads can play in front of it) or not. The premier tier is currently invite-only but we want to open it up to more artists as fast as we can.

If a user (currently US only) is listening to their stream and they start playing a track a premier member has decided to monetise an ad will play in front of it. There are some other factors that will influence ad frequency obviously, but that is the general behaviour.

Aren't you in the perfect position to establish a premium subscription for users, establishing a market place for musicians without the labels? Say, a user could choose the ad-supported model or a model where he deposits some money in a soundcloud account. A musician can then have some songs available for free, some songs available with ads played beforehand or some soungs available easily for a micropayment from the user's soundcloud account (say 5 cents). Soundcloud gets 30%, the musician 70%. If you love the song or album, you sell unlimited access (and download) to the song or album for something decided by the musician.

Just because ads are a horrible way to monetise a web endeavour.

From the linked article: "Eventually, [SoundCloud] plans to introduce a paid subscription that will let listeners skip those ads, as they can with Spotify and other licensed services."

Subscriptions and rev shares are generally far less friction than charging up an account and explicitly giving a micropayment to an artist. I think SoundCloud already is a "marketplace" where independent artists can function without labels (if they want to do all the other work that labels cover), just that currently all transactions happen outside of the platform. That said, I don't have any more info about how a premium subscription for users would function.

You should put the ads up on the screen, in a non-intrusive fashion. Having the ad play in front is everything that is ass about radio. There are few things more disruptive than listening and expecting to hear some good music of ____ genre only to have some muzak come up instead followed by a pitch for auto insurance or something that is usually utterly irrelevant to the listener. It has made Youtube playlists almost unlistenable, for example.

If you must have ads then you should have content restrictions like google did with Adwords. Allow no music, no sound effects, no time effects, just a vocal sales pitch with ordinary dynamic range and -12dB peak loudness. The extremely limited options for Adwords presentation are what makes them bearable, in contrast to the hideous animated mess of typical internet banner ads.

This is a one-time opportunity to establish standards that will support rather than undermine your brand. If you let advertisers have free reaign over what to do with their slots then you'll get disrupted in turn. I already hesitate to embed Soundcloud clips because the embeds don't have any volume control and the play/volume controls on the site have been moved to the opposite end of the screen from everything else, a depressing example of a user-hostile 'dark pattern'.