Soundcloud finalizes licensing deal with Universal Music Group; subscription plan rumored to launch in 2016

BY Evan Selleck

Published 13 Jan 2016

image SoundCloud iPad app

Streaming music is a big market these days, with plenty of options to choose from. A lot of competition, which is only getting more intense as new, already-established names start entering the fray.

That includes the likes of Pandora, which is already a household name for streaming artists in a radio-like fashion. That will be expanding at some point in 2016, as Pandora recently acquired the streaming music service Rdio, and is expected to launch its own paid subscription option at some point this year.

And now another service, which was known for its free services, will be looking to lock in subscribers through monthly installments at some point in 2016 as well.

According to a report published recently by the New York Times, Soundcloud has finalized licensing deals with Universal Music Group, or UMG. With this deal in place, it means that Soundcloud now has access to music from artists like Drake, Kanye West, U2, Sam Smith, and The Weeknd. The deal also means that these artists, and all the artists under UMG’s umbrella, will net revenue from advertisements played on Soundcloud.

Soundcloud’s presence is a strong one already, and many artists have already embraced the service as it is. That includes the likes of Miley Cyrus, an artists under UMG’s label, which released her latest album, Miley Cyrus & Her Dead Petz, via Soundcloud first. Drake has released singles through the service in the past as well. Which makes sense, considering Soundcloud’s user base is 175 million every month.

As it stands, Soundcloud already has deals in place with Merlin, which is a collection of independent record labels, and the much larger Warner Music Group. However, one holdout at this point is the Sony Music Group, which actually pulled its music from Soundcloud last year. It would stand to reason that Soundcloud is still trying to finalize licensing deals with SMG, in order to truly offer a large range of music collections for its listeners.

With these deals in place, the labels can launch music from their artists that is only available behind a paid subscription, so that would likely be the case with any other high-profile tracks or albums that find their way to Soundcloud in the future.

All this to say that Soundcloud is working on a paid subscription service, which is expected to launch in 2016. Soundcloud wouldn’t comment on what features the service would bring to the table, or even an expected launch date, but for any Soundcloud users that have wanted to keep it in-house when it comes to a paid subscription, the chance is coming.

This news follows reports that Apple Music, the Cupertino-based company’s own streaming music service, has just reached 10 million paid subscribers. That puts Apple Music just behind Spotify, the current leader in paid subscriptions, which has 20 million paid subscribers — of the total 75 million listeners every month. If Soundcloud, which has 100 million more listeners than Spotify, does indeed launch a paid subscription service, it will be interesting to see how many transition to that paid model.

If you use Soundcloud, would you switch to a paid subscription model?

[via The New York Times]