Warner Music Group (WMG) has inked a milestone deal in the Great Streaming Wars, agreeing to license its music to SoundCloud Ltd. With the commitment, WMG becomes the first major record label to profit from the wildly popular German audio-sharing site.
According to the Wall Street Journal, SoundCloud will pay royalties to both Warner Music and its publishing division, Warner/Chappell Music, for every WMG-artist stream on its free, ad-supported service, as well as for songs played on a new subscription service. This will also include mashups and remixes.
SoundCloud’s plans to deliver a premium subscription in the first half of 2015 was the sealing point for Warner. The free, ad-supported service that boasts millions of users will provide a host of new features, to be rolled out in the coming months.
SoundCloud currently profits through its “Pro” subscription tiers, alluring artists to post tracks to the site in hopes of gaining exposure. But thus far, all profits within the music industry have been locked out, including those of artists and publishers. The Warner and SoundCloud arrangement will produce profits for both sides, a marriage of two opposing forces in the currently rocky geography of the music industry.