The buzzing online music streaming site soon to partner with major record labels
Soundcloud has made substantial progress in becoming one of the most popular streaming sites, to the point where artist are now releasing singles, EP’s and mixtapes through the free domain. According to Bloomberg, major music labels (the big three) Universal Music Group, Sony Music Entertainment and Warner Music Group all are close to closing in on a deal for a stake in the digital-music service.
You may wonder, why is the successful streaming site negotiating deals with labels? To avoid lawsuits regarding copyright violations of music post without licenses from record companies and publishers. If the deal closes, the Berlin based start-up will be able to continue to host these songs without facing potential legal claims.
Earlier in the year, there were rumors circulating that Twitter was set to pursue Soundcloud, but the deal was never completed.
The private company has not been on the market for the public to purchase stock, but according to insiders, the company is now worth anywhere from $500-$700 million. The power of technology…
While many independent artists helped make Soundcloud popular (by using the application), a number have expressed frustration and have even gone as far as not using the site due to it’s membership fees and their no royalties policy (i.e., artist not getting paid). Some even suggest that the only reason Soundcloud is closing deals with these major labels, is because they have to close but the value opportunity of the sale seems compelling.
In June, co-founder and chief of technology Eric Wahlforss talked about the progress the company is attempting to make with regarding monetization The Guardian,
Right now in the U.S. we’re experimenting with different monetization approaches,” he said. “We’re throwing a couple of things out there and testing the waters a bit. We’re super-excited about where this stuff can go.
“When you have millions of followers and millions of listeners, you’ve got [a] point [in] expecting there to be some sort of monetization there. We hear that loud and clear.”
[Bloomberg has contributed to this report]