Though the platform boasted more than 175 million monthly listeners in 2014, it still does not pay royalties to the majority of labels and music publishers.
SoundCloud has met some resistance since coming to the music industry with its monetisation plans. Sony has removed Adele, Kelly Clarkson, Passion Pit, Leon Bridges, Miguel and Hozier, among others from the streaming site after accusing SoundCloud of not providing enough options for it to make money from the music it hosts. Representatives from Sony Music and Columbia Records have not released an official statement about the music’s disappearing act, though “a lack of monetisation opportunities” is believed to be at the root of the problem.
The ‘breakdown in negotiations’ with Sony did not stop SoundCloud from getting a notable deal. SoundCloud has signed a landmark licensing deal with music publishing group the NMPA. The National Music Publishers’ Association is the trade association representing all American music publishers and their songwriting partners.
The Rights Agreement will allow independent publishers and songwriters to receive royalties through the monetisation of content that contains their compositions on SoundCloud.
NMPA President and CEO David Israelite said: “This agreement ensures that when SoundCloud succeeds financially, so do the songwriters whose content draws so many users to their site.”
“I am thrilled that we could agree on terms that will benefit both creators and the SoundCloud platform that has brought online music access and creativity to a new level.”
In addition to the NMPA, Soundcloud has also been able to strike a licensing deal with Warner Music Group. Warner is believed to have taken up to 5% equity in SoundCloud as part of the deal, adding to investment into the company that’s now surpassed $120 million.
SoundCloud was originally founded in Stockholm, Sweden, but was established in Berlin in August 2007 by Swedish sound designer Ljung and Swedish artist Wahlforss. The founders initially aspired to allow musicians to share recordings with each other, but the concept later transformed into a full publishing tool that also allowed musicians to distribute their music tracks.