Warner Music Group has become the first major record label to sign a licensing deal with SoundCloud. The agreement will see SoundCloud pay royalties to the label each time a song that’s monetized is streamed or even when one of its songs is spliced into a mashup according to a report from The Wall Street Journal.
The deal will no doubt help SoundCloud attract new listeners to its existing service as well as a new subscription service it’s planning to launch next year.
Warner Music represents a vast array of popular artists including Bruno Mars, The Black Keys and the Red Hot Chili Peppers, just to name a few. Interestingly enough, the label won’t be required to make its entire catalog available as SoundCloud has traditionally been used to discover underground artists.
Full terms of the deal weren’t disclosed although people familiar with the matter claim the label is taking a three to five percent stake in the company in addition to royalties.
The Berlin-based audio sharing platform has been in the news quite a bit in recent months. Back in August, the service launched a creator partner program called On SoundCloud that laid the foundation for content creators to start making money from their work.
In order to come up with the funds to pay artists, however, the site made the decision to introduce advertising – a first for SoundCloud.
More recently, SoundCloud partnered with Twitter (rumored to be a potential suitor for the audio platform not all that long ago) to bring music and audio to tweets through the use of Audio Cards.