Universal Licenses Music to SoundCloud for Streaming

SoundCloud has 175 million monthly listeners, compared with top webcaster Pandora’s 78 million

Universal Music Group — the biggest recording label in the world that distributes music from artists like Adele, Taylor Swift and Kanye West — agreed to license music to SoundCloud, a popular online source of user-uploaded tracks known as the “YouTube of audio.”

The deal is a major step toward legitimizing online upstart SoundCloud. The site attracts some of the greatest numbers of music listeners online, but it has rankled the music industry in the past because of its early reputation for being cavalier about royalties. A site where users can upload their own sound files, SoundCloud experienced much of the same industry tension that YouTube faced as it grappled to manage unauthorized uploads of copyrighted material.

That tension amplified as SoundCloud grew wildly popular. It has 175 million monthly listeners, compared with the 78 million active listeners who tune into online radio provider Pandora and streaming-music service Spotify’s 75 million active users.

As SoundCloud rolls out advertising and introduces subscription services in the U.S. and other markets later this year, Wednesday’s deal gives the site access to material from Universal’s roster of recording artists and songwriters signed to Universal Music Publishing Group, the companies said.

UMG’s labels and its publishing company will be able to tap SoundCloud’s promotional tools, analysis and data in order to build more revenue and to strengthen fan connections, they added.

“With this partnership, we’re ensuring recording artists, songwriters and labels benefit, both creatively and commercially, from the exciting new forms of music community engagement on SoundCloud,” said Lucian Grainge, UMG’s chairman and CEO.

Previously, SoundCloud already secured licenses from Warner Music Group as well as Merlin, a body representing thousands of independent labels.