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Universal to license music to SoundCloud in streaming deal

Wed 13 Jan 2016

Adele SoundCloud

Universal Music Group has agreed to license some of its music to online audio distribution platform SoundCloud – a major step for the popular startup, which has struggled to receive legitimate recognition in the industry.

The digital audio service attracts one of the greatest number of online listeners, but has suffered with an early reputation for not attaching enough importance to copyright issues. The Germany-based site, founded in 2007, which allows users to upload their own sound files, now counts over 175 million monthly listeners. The figure shrouds statistics from rival sites, with online radio Pandora’s 78 million listeners and Spotify’s 75 million active users.

As SoundCloud introduces advertising and premium subscription options in the U.S. 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. SoundCloud will enjoy access to Universal material, including work from top global artists signed to the label such as Adele, Taylor Swift and Kanye West.

Conversely Universal will also be able to access SoundCloud’s advertising, analytics and data tools with the aim of increasing revenue streams and bolstering fan/artist engagement.

“With this partnership, we’re ensuring recording artists, songwriters and labels benefit, both creatively and commercially, from the exciting new forms of music community engagement on SoundCloud,” said Universal’s chairman and CEO, Lucian Grainge.

Universal’s deal allows the giant to control what music it makes available over the free site, and to adjust the lengths of the song samples that users can share with friends on social media, according to a person familiar with the setup.

Previously, the audio-sharing site has secured license agreements with Warner Music Group (November 2014), and independent record label agency Merlin, in June 2015.

Sony Music Entertainment has also been in negotiations with SoundCloud, but is yet to reach a licensing agreement. Sony had removed many of its most popular artists’ tracks from the platform last year.

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