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Warner becomes first major label to strike licensing deal with SoundCloud

Warner becomes first major label to strike licensing deal with SoundCloud


A premium version of SoundCloud is coming next year

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SoundCloud can finally say it's got the support of at least one major music label: Warner Music Group. The streaming site has signed a licensing agreement with Warner and will pay the label royalties whenever one of its songs is played on SoundCloud. Warner will also earn money if a song from its catalog is cut up and spliced into mashups on the site, according to The Wall Street Journal, where news of today's deal was first reported.

Warner was allegedly hesitant to sign any pact with SoundCloud until the company promised to deliver a premium subscription offering to consumers sometime in the first half of 2015. The free, ad-supported service that millions of consumers use every month will remain available, though we don't yet know much about what's planned for paying listeners.

SoundCloud currently makes money from musicians and DJs who sign up for its "Pro" subscription tiers and post tracks to the site in hopes of gaining exposure. But it's produced zero profit for the music industry as a whole; record labels and artists were completely left out of the mix until Warner and SoundCloud struck this latest arrangement. Now it might start producing profits for both sides — especially if a premium version is on the way. Just don't expect to see all of Warner's roster on SoundCloud; the deal reportedly doesn't require Warner to go all in with its entire catalog. But the label is walking away with a stake in SoundCloud as part of the pact.