WMG is the first music major to close a deal with SoundCloud

After months of rumours, SoundCloud has today confirmed that it has a licensing deal with Warner Music Group.

The deal will centre around the streaming service’s ad-supported, creator partner program, ’On SoundCloud’ that was launched in August, as well as a paid subscription streaming service that will launch in the first half of 2015.

While terms of the deal are not being disclosed, Alexander Lung, SoundCloud’s Founder & CEO, has stated: “We’re thrilled that Warner Music Group will be the first major label to join our new creator partner program. We expect to generate significant revenue for Warner and its artists in the months and years ahead as we roll out an ad-supported offering and subscription service that delivers real value to the industry.”

Prior to this, SoundCloud’s negotiations with the three major labels had stalled and acquisition talks fell apart between Twitter and the music streaming company. The details of the failed deals are unavailable but it is understood that talks with Sony and Universal are continuing.

The exact details of the partnership have yet to be specified, although a generic description of “new commercial and promotional possibilities” for WMG’s roster of recording artists and songwriters has been given. It is also expected that WMG and artists it represents will have more control over how their content is posted on the platform, both as direct tracks and user-generated mixes.

WMG has made it known that it is willing to embrace the fledgling digital music companies, having signed licensing partnerships with both Shazam and Clear Channel.

“This leading-edge partnership reflects WMG’s commitment to establishing new and alternative business models that recognise the value of music for our artists,” said Rob Wiesenthal, Chief Operating Officer/Corporate, WMG in a statement. “SoundCloud is a platform built on music innovation and it has a rare ability to drive music discovery while enhancing the connection and collaboration between an artist and their following. Our deal will foster that relationship, while providing a powerful range of income opportunities for WMG’s artists and songwriters.”

Thanks to the new union, SoundCloud is now set to enter a new chapter as a major platform for the distribution of professional music content.

Jonathan Dworkin EVP, Digital Strategy & Business Development, WMG said: “This deal will enable SoundCloud to further develop its product as well as its massive user base, and will deliver multi-tiered monetization while preserving the elements that have made the service so popular. It’s a win for artists, for rights-holders and for consumers.”