Germany-based music streaming company SoundCloud has struck a licensing deal with Universal Music Group, the music industry giant that represents some of the industry’s biggest names. The new deal is similar to previous ones that the streaming company has inked with Warner Music, the National Music Publishers Association, and Merlin.
The new deal gives SoundCloud access to the Universal catalog, and allows artists who work through Universal, such as The Weekend and Sam Smith, to receive revenue for plays via ads on the free streaming service.
SoundCloud currently boasts around 175 million monthly users, and is employed by many popular artists as a means of promotion for new songs, upcoming albums, and other audio-based marketing. This works because the company allows its artists, who currently include everyone from world famous musicians to bedroom hobbyists, to upload and take down material at their own whim, rather than tightly controlling a central catalog of music.
Although most of the world’s major music publishing arms are now officially working hand-in-hand with SoundCloud, there is one notable holdout: Sony Music. The company has yet to work out an official deal with the streaming service, and that is likely the last piece of the puzzle before SoundCloud is finally willing to launch a paid version of its currently free music service, which executives have said is coming in some form by the end of 2016. Sony pulled all of its music off the service last year.
Part of the reason Sony could be reticent to ink a deal with the German company is because of its past issues with royalty payments; Just two weeks ago, SoundCloud settled a lawsuit with U.K.-based publishing group PRS Music over royalty issues.
For SoundCloud to move forward with its planned paid subscription-based rollout without a big, gaping, hole in its offerings, it will have to strike a deal with Sony. And with Sony as the only big fish left, the Japanese company’s catalog could now cost a pretty penny.
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