SoundCloud close to finalising major label deals

SoundCloud is said to be close to deals with Universal Music Group, Sony Music Entertainment and Warner Music Group for licensing rights to continue hosting songs.

The Berlin-based company has more than 250 million users per month and is keen to avoid potential legal disputes, according to sources familiar with the discussions. The platform is said to be offering each label a 3-5% stake with a percentage of future revenue.

If a deal is reached, SoundCloud would be valued at $500-600 million, say sources. The company was valued at $700 million during an investment round this year, according to another source, with the difference in figures attributable to licensing not being the same thing as more traditional investment deals.

The insiders added that timing of the deal is yet to be confirmed, as some music labels are closer to finalising than others.

Until SoundCloud’s revenue reaches a certain level, it will pay labels based on song plays, according to the services.

Source: Music Week