BERLIN (CelebrityAccess) — Music streaming service SoundCloud has garnered its first official major label partner after striking a major deal with Warner Music Group.
The deal covers SoundCloud's ad-supported, creator partner program, "On SoundCloud", and its subscription streaming service that is due to launch in the first half of 2015 and provides Soundcloud with access to artists signed to Warner's labels, including Atlantic, Asylum, Elektra, Parlaphone and Nonesuch, as well as songwriters represented by its music publishing operation, Warner/Chappell.
However, the deal is unique in it does not provide SoundCloud with unlimited access to Warner catalogs, instead providing Warner and affiliated artists with significant latitude in the availability of content on the service.
As well, the New York Times reported that Warner will acquire an equity stake of 3 to 5 percent of SoundCloud and that the terms of the agreement will protect the Soundcloud from previous copyright infringement claims in regards to Warner artists.
While SoundCloud may not have the cachet as other services such as Spotify, it has created a niche for itself through its popularity with artists due to its easy integration with social media services such as Twitter and Facebook and is often used by artists to tease brand new material to fans. At the same time, Soundcloud has been operating in the red, losing $29 million on revenues of just $14 million last year.
Other major labels, including Sony and Universal are also said to be in very early talks with SoundCloud.
Alexander Ljung, SoundCloud’s founder & CEO, said, “We’re thrilled that Warner Music Group will be the first major label to join our new creator partner program. We expect to generate significant revenue for Warner and its artists in the months and years ahead as we roll out an ad-supported offering and subscription service that delivers real value to the industry.” – Staff Writers