SoundCloud Will Start Giving A Cut To Major Labels

SoundCloud is rumoured to be making great strides towards avoiding future lawsuits. Reports indicate that the popular online audio database is going legit and selling a 9-15% stake in the company to the three major record labels, though the deal is yet to be officially announced.

According to sources cited by Bloomberg, the deal has not yet been officially announced as certain parties are closer to signing than others. The deal, if successful, would make it possible for SoundCloud to continue letting users stream label-owned music under new licensing deals.

Meanwhile, two sources have reportedly confirmed to Billboard that the details of the Bloomberg report are accurate, and that the deal will be signed imminently. Details of the deal, however, including licensing rates and each major’s exact ownership percentage, were not available.

As Billboard reports, SoundCloud received some criticism earlier this month for their increasingly draconian stance on copyright, which Australian band Bluejuice experienced for themselves back in May, after they were blocked by SoundCloud for apparently ripping off their own song.

The deal is business-as-usual for the majors, who already hold minority stakes in online streaming services, but is a big step for SoundCloud, who earlier this year were rumoured to be on the hit-list of Twitter. Rumours at the time indicated Twitter was looking to acquire SoundCloud for $2 billion.

Online video giant YouTube is currently embroiled in a controversy involving a coalition of independent record labels, who say the site is strong-arming them into signing unfair licensing deals that give more profits to major labels, recently filing a complaint with the European Commission.

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