SoundCloud Reportedly Agrees to Licensing Deal with Universal, Changes Coming

Sources say SoundCloud and Universal Music Group have finally come to terms...

The streaming wars are in full swing as artists, labels and services scramble to provide the best content with appropriate compsensation for all parties involved. Easier said then done, as we've seen, but we might soon be one step closer to cohesion in the industry, as sources told Music Business Worldwide (MBW) that SoundCloud is very close to reaching an agreement on a licensing deal with Universal Music Group.

The two companies have been in negotiation for months as UMG has consistently pushed for more stringent requirements, among them a significant equity stake in the streaming service (similiar to their deal with Spotify) and guarantees about a new subscription tier to be added in addition to the current ad-supported model. It will obviously be interesting to see how this affects the service's user experience, and judging by the massive takedown and account suspension binge last week it's likely we've already seen early effects of the potential agreement.

If content removal and paid subscriptions aren't getting you all hot and excited, at least take some amusement in this quote, given to MBW by an insider:

“Universal had a couple of aggressive choices: they could either sue SoundCloud, which wasn’t off the table, or refuse to play ball with them and watch them slide out of existence as money ran low. But Universal knows that a world with a SoundCloud that it can control is better than a world without SoundCloud full stop – especially if that leads to a hundred clones popping up online. Initially, UMG’s demands were completely unacceptable to SoundCloud, but the balance of power – of who needs who to prosper – appears to have shifted since those days.”

Good to know Universal no longer hopes to "watch them slide out of existence." Let's just hope all of this gets resolved soon, and in the best interests of both artists and music consumers.

[By Brendan Varan, dispirited free music streamer. Follow him on Twitter.]