SoundCloud Confirms Deal for Sony Music Rights

The audio-upload startup paves the way for paid subscriptions by sealing licenses with the last of the Big Three record labels

Streaming-audio service SoundCloud confirmed on Friday that it has secured a deal with Sony Music Entertainment.

Sony was the last of the Big Three record labels to block SoundCloud from advancing its goal of launching a subscription tier for licensed music. The company made a similar pact with No. 1 recording company Universal Music Group in January, after reaching a deal with Warner Music Group last year.

SoundCloud, known as the YouTube for audio, is one of the Internet’s most popular sources for music. It attracts 175 million monthly listeners, compared to the 75 million active users of streaming-music service Spotify. SoundCloud’s listeners tune into its mix of official music as well as user-uploaded tracks and DJ mashups, but much like video-upload site YouTube, it rankled copyright holders in its early years as it struggled to manage unauthorized content.

That tripped up SoundCloud’s efforts to turn record labels into allies willing to license their catalogs.

Alexander Ljung, SoundCloud founder and CEO, said in a statement that the deal was “of particular significance” because it means SoundCloud now has deals in place with all of the major music labels.

Sony’s deal includes its own artists as well as those on affiliated and distributed labels, like The Orchard and RED Distribution.

Dennis Kooker, Sony’s president of global digital business and U.S. sales, Sony Music Entertainment, touted the startup’s “large user base of highly-engaged, passionate music fans.”

“This agreement creates a business framework for the use of Sony Music songs on the SoundCloud platform that meets the needs of our artists and labels, and supports the growth of SoundCloud through its new premium on-demand music tier,” he said.

SoundCloud currently has a limited advertising business and has planned to introduce subscription services in the U.S. and other markets later this year.