SoundCloud Would Avoid Lawsuits Under Reported Label Deals

Marc Hogan

By Marc Hogan

Lead News Writer
on 07.11.14 in News

Recent changes at SoundCloud now have a little more context. The user-uploaded streaming site is nearing an agreement with the three remaining major record labels, Bloomberg reports, citing unnamed people with knowledge of the plans.

The deals would give Universal Music Group, Sony Music Entertainment and Warner Music Group each a roughly 3 percent to 5 percent stake in the Berlin-based company, the people said. In exchange, the labels would agree not to sue the startup, which boasts more than 250 million monthly listeners. The labels would also get a share of future revenue in the deal, which two people familiar with the talks reportedly said deems SoundCloud worth $500 million to $600 million.

Yesterday, SoundCloud went live in beta for users of Sonos, the wireless speaker system you may recall from those commercials with Janelle Monáe.

An outcry ensued among SoundCloud users earlier this month after the blog Do Androids Dance reported that the streaming platform had said it allowed Universal to take down songs directly. SoundCloud declined to deny that in a statement to Mixmag. A source told Billboard the matter was no big deal and similar to how YouTube operates.

Previously, Twitter considered buying SoundCloud but opted against it after crunching the numbers, The Wall Street Journal reported in May, citing an unnamed person familiar with the matter.

Meanwhile, SoundCloud co-founder Eric Wahlforss recently told Music Ally the company is looking at ways of paying artists.

Which is good, because $500 million to $600 million divided by “free” is … well, it’s a lot.