SoundCloud has struck a deal with Warner Music that will be paving the way for it to establish a new paid premium version of the service. Under the terms of the agreement, SoundCloud will pay royalties to Warner for every song played; while the music group in turn will make most of its catalogue available to listeners.
The service is currently free to use, although it does serve ads. This had apparently put Warner Music off from signing any deals until SoundCloud promised to deliver a paid subscription version of the site in the first half of 2015. It is unknown whether the subscription service is part of the deal or if SoundCloud had already been building something of the sort. In any case, there are still no details about what this premium version of SoundCloud will look like.
Warner will be paid for more than just people playing its music. It will also earn money if its songs are included in user made mashups or sampled in other user songs. This could potentially increase the earnings of the company, although it is unknown if it will also be paid for covers.
This could be good news for SoundCloud as having a larger catalogue of music could draw more users in. More users flocking to the service could also be good news for musicians hoping to be noticed, as it is much easier to get music onto SoundCloud than it is on other music streaming sites. With any luck, more music labels will join Warner in signing deals with the service.
[Source: The Verge]