Soundcloud has announced that it has signed an agreement to licence music from Warner Music Group, who are one the big three major labels.
As part of the deal, Warner Music will be given an equity stake (apparently between 3-5%) in exchange for them not suing the German music sharing platform, Soundcloud in turn will now have to pay the label royalties when users use their music in mash-ups and unofficial remixes.
The deal will work alongside the company’s newly launched ad-supported service, and will also see Soundcloud launch a new subscription service in 2015.
Apparently Soundcloud will still offer free music but it seems like the big labels are going to have much bigger impact on the service going forward.
Quite how this will sit with the current community it’s hard to say but the thought of a two-tier Soundcloud doesn’t sound all that appealing. The status quo at the moment is the creators pay but now it sounds as if everyone will have to pay.
Soundcloud still needs to entice the two other major labels but with one on board it surely won’t be long before the majors have quite a big stake in the platform moving forward.
Just don’t cock it up, please.