Monday, August 24, 2015

Universal Music To Get A Piece Of Soundcloud

Universal Music Group logo image
Soundcloud is trying hard to go legit and if industry insiders have it correctly, a deal with Universal Music is imminent. This would be the second of the 3 major labels to license their music to Soundcloud, the first being Warner Music Group in November of last year.

As with most licensing deals these days, Universal is said to have pushed for equity in Soundcloud as well as an advance in exchange for the deal. Warners already owns 5% of the company, and it's said that Universal will actually receive a larger piece based on its market share, which is much larger than WMG.

This is a continuing trend in music distribution today where the 3 major labels will not grant a license unless they receive equity in the company. This worked out well for Warners in the Beats Music deal when Apple purchased the company, as the holding company that owns Warners walked away with a hefty profit.

The major labels are hoping that happens again with Spotify (they all hold equity), and now also with Soundcloud.

Of course, none of that income goes to the artist, falling instead to the company's bottom lines. Once again the artist only sees a trickle of the major income. Same as it ever was.

3 comments:

ScreamingPirhana said...

There needs to be an alternate music industry, run, not by corporate types, but by people who love music. Hopefully FOR people who love music enough to support it. And then maybe some decent content will start appearing again. The flaw in this reasoning is that too many people have absolutely no taste in music these days, they are not equipped. The upside is, they're followers and if enough real music fans start a trend, maybe they'd follow.

Don Coyer

Anonymous said...

There's a near infinite supply of quality content out there. Maybe you just don't understand people's taste in music these days (happens to everyone).

Peter McDonald said...

Surely this is a complete abuse of power. I don't blame Spotify or Soundcloud for making such deals, after all if they do not receive the streaming rights their business has gone but labels should not be able to wild such power.

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