After what has likely been years of heated discussions and negotiations,
The deal brings Sony’s massive catalog to the platform just ahead of a planned relaunch at some point later this year for the streaming site. As it stands now, SoundCloud is entirely free to listen to, and while that works perfectly for fans, bigger artists and their labels certainly aren't happy with the lack of royalties collected and the low payouts, when they happen at all. The company has been working on a proper, paid service for some time now, and while details about what it may be few and far between, the giants of the industry are now behind it, so whatever is coming must be worthwhile.
Warner was the first of the trio of majors to find a satisfying deal with the streaming music platform back in late 2014, and once one of the largest companies was on board, it was only a matter of time until the others jumped on board as well. Universal also just recently signed a licensing deal, with the news breaking in January of this year.
SoundCloud has an incredibly-impressive 175 million monthly users around the world, easily making it the second most popular streaming option out there, aside from YouTube. While the company certainly doesn’t have the problem of getting people to visit the website and use it, SoundCloud is plagued with other issues, including massive illegal uploads of other people’s copyrighted content and mounting losses quarter after quarter. Sure, the masses are there, but the money isn’t...yet.
According to a report by Music Business Worldwide, as part of the agreement, Sony now controls a certain amount of equity in SoundCloud, which has been able to raise hundreds of millions in funding over the years. The record label will also likely contribute some of its own dollars at some point in order to ensure that the streaming platform can develop a standout product and launch to market successfully.
A press release posted by SoundCloud states that though the platform already has over “110 million” songs, adding Sony’s massive library of hits and up-and-coming acts only makes that number swell even further. Most streaming services feature catalogs in the lower tens of millions, but SoundCloud is unique in that it is a place where millions upon millions of remixes, covers, and mashups have found a home, unlike on future rivals like Spotify or
“This agreement creates a business framework for the use of Sony Music songs on the SoundCloud platform that meets the needs of our artists and labels, and supports the growth of SoundCloud through its new premium on-demand music tier,” commented Dennis Kooker, President, Global Digital Business & US Sales, Sony Music Entertainment in a release announcing the partnership between the two companies. Everybody involved in the music industry has known for some time that a paid streaming service was coming, but nobody would acknowledge it for years. Now, with Sony signed on and all three major labels ready to stand behind SoundCloud as it changes business models, the two aren’t hiding the fact that such a product is coming, so be prepared.
