Soundcloud confirms royalty deal with 20,000 independent labels

Since Soundcloud first started to gain traction, there's been a debate about its revenue streams. Without any official licensing deals in place, Soundcloud had always been useful for artists to get recognised, but never useful enough for an artist to actually make money off those 500,000 plays. And given it was these artists that give Soundcloud a reason to exist in the first place, that was always going to be a problem.

Recently the service has been striking label deals and beginning to host advertising, putting Soundcloud ever closer to Spotify levels of legitimacy. Their most recent deal is a royalty partnership with over 20,000 independent labels.

Soundcloud's latest deal goes through Merlin, the rights agency that represents smaller labels. On Merlin's roster are labels like Beggars Group, Domino, Secretly Group, Warp, PIAS, and Ninja Tune, who will all now be eligible for royalties through Soundcloud. Quite a big coup, that.

This follows other deals, such as one with the National Music Publishers' Association, who handle copyrights for songwriting rather than recordings. Soundcloud are still trying to work out deals with the majors, but when have the majors ever made life easy?

Still, they're a while away from giving money to all the countless unsigned artists using the service, and as Soundcloud make greater strides towards legitimacy it's important that they maintain how useful their service is for discovery rather than turning into a Spotify clone. But the next couple of years will be interesting to watch.

[via New York Times]