Major Labels

Universal Music Cuts Deal With Soundcloud, Reported Equity Stake Could Hurt Artists

SoundCloud_logo (1)Soundcloud went on a takedown spree last week, angering some users.  Now we may know why.  After months of sometimes contentious negotiations, the audio hosting site is reportedly finalizing a deal with the world's biggest music group, Universal.

Soundcloud is in the final stages of a licensing deal with the Universal Music Group, sources tell MBW. The deal would reportedly give UMG a substantial stake in Soundcloud.  

While details of the deal are not yet known, many in the industry question the efficacy of similar label deals with other music streamers which exchange potential revenue for artists for an equity stake for the corporation which artists often do not participate in. 


Warner Music Group, Merlin and the National Publishers Association have all completed deals with Soundcloud for its On Soundcloud service and a yet to launch paid subscription service. 

That leaves Sony, the second largest player after UMG, the missing deal in Soundcloud's monetization strategy; and given Sony forced takedowns earlier this year, a deal may not be imminent.

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  1. If the major labels continue to move in this direction don’t be surprised if class action lawsuits against them, for any number of reasons, gather like dark clouds on the horizon.
    The music business may need to hit its’ bottom and then rebuild from total collapse. Musicians and songwriters are already reaching their breaking point with some choosing not to release recordings. Sadly, everyone but a handful of profiteers are suffering badly.
    The true irony? Individuals running some of these unsustainable, money losing businesses are being compensated extravagantly as most creators fight for their financial survival.

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