SoundCloud ties in Universal Music ahead of planned paid subscription service

Just three days after reportedly raising $35 million (article in Swedish) in debt financing, audio-streaming service SoundCloud has announced a new agreement with Universal Music Group (UMG).

The deal will see SoundCloud gain access to UMG’s slew of artists ahead of a planned paid subscription service launch later this year. A number of big-name labels operate under UMG, including Virgin Records, Blue Note Records, Geffen Records, Island Records, Motown Records, and Polydor Records, so this is a major boost for SoundCloud as it moves to become a much stronger commercial entity. That said, UMG will retain control over which of its artists are made available on the free version of the platform.

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A key facet of the deal will also mean that user-generated remixes and mashups may be allowed to live on SoundCloud without fear of facing the chop on copyright grounds, though SoundCloud wouldn’t elaborate on the specifics of what the framework entails.

Back in December, a U.K. music-licensing company, “Performing Rights Society for Music,” dropped a lawsuit against SoundCloud after inking a multi-territory agreement with the company. SoundCloud had also previously signed deals with Warner Music Group and with Merlin, a company that handles streaming deals on behalf of more than 20,000 labels and distributors.

Part of the package for labels and publishers signing with SoundCloud includes access to key promotional tools, as well as analytics to give artists key data on their fans.

“With this partnership with UMG we will further strengthen and grow the unique community we’ve built over the past seven years, where multiple forms of expression can live and where artists at every stage of their careers come to create and share their work,” said Alexander Ljung, SoundCloud founder and CEO. “Bringing together the world’s largest audio platform and the world’s largest music company means we are able to further expand SoundCloud’s role as a critical platform for creators and open up its benefits to UMG’s extensive roster of artists.”

SoundCloud is different from other music services, such as Spotify, insofar as SoundCloud is geared toward creators and allows anyone to upload their music or podcasts in order to build a fan base. But SoundCloud has also been pushing to monetize its platform with a number of initiatives — including On SoundCloud — a platform that runs ads against audio tracks for users within the U.S. SoundCloud also expanded beyond English-language markets for the first time last year when it launched for the Brazilian Portuguese fraternity, which represents a big market for the company.

With more than $130 million in funding and 175 million unique monthly listeners, SoundCloud has built a sizable user base since its launch out of Sweden way back in 2007. The company is now headquartered in Berlin.