Rumors first materialized in the summer of 2015 about SoundCloud’s plan to establish a subscription service which was largely dependent on the platform’s ability to close deals with major music labels.
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The deal follows SoundCloud’s accords with Warner and indie label representative Merlin agreed late a year ago.
Universal’s deal allows it to control what music it makes available on the free platform, and to adjust the lengths of the snippets of songs that users can share with friends on social media, this person said.
Back in December, U.K. a music-licensing company, “Performing Rights Society for Music”, dropped a lawsuit against SoundCloud after inking a multi-territory agreement with the company.
At UMG, we have long-embraced empowering entrepreneurs and innovative services such as SoundCloud, said Lucian Grainge, Chairman and CEO of Universal Music Group.
SoundCloud, sometimes described as the YouTube of audio, allows its users to upload tracks, including remixes and mash-ups of existing material. In addition, UMGs labels and publishing company will gain access to SoundClouds promotional tools, analysis and data to provide recording artists and songwriters with new opportunities to generate revenue and to strengthen their connections with fans. The streaming service is starting to transform their business model as the implementation of advertising through the On SoundCloud program has created a new dynamic for the music industry and consumers.
Founded in 2008, SoundCloud says it has 175 million monthly listeners.
As SoundCloud introduces advertising and premium subscription options in the USA and other global markets, today’s deal with the world’s largest music company is expected to be a huge commercial advantage for both parties.
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Chief Content Officer for SoundCloud Stephen Bryan told Billboard that the subscription service is slated to arrive by the second quarter of the year.
