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Universal Music Cuts Deal With Soundcloud, Reported Equity Stake Could Hurt Artists

LOS ANGELES (Hypebot) – Soundcloud went on a takedown spree last week, angering some users. Now we may know why. After months of sometimes contentious negotiations, the audio hosting site is reportedly finalizing a deal with the world's biggest music group, Universal.

Soundcloud is in the final stages of a licensing deal with the Universal Music Group, sources tell MBW. The deal would reportedly give UMG a substantial stake in Soundcloud.

While details of the deal are not yet known, many in the industry question the efficacy of similar label deals with other music streamers which exchange potential revenue for artists for an equity stake for the corporation which artists often do not participate in.

Warner Music Group, Merlin and the National Publishers Association have all completed deals with Soundcloud for its On Soundcloud service and a yet to launch paid subscription service.

That leaves Sony, the second largest player after UMG, the missing deal in Soundcloud's monetization strategy; and given Sony forced takedowns earlier this year, a deal may not be imminent.