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Monday, August 24, 2015
Universal Music To Get A Piece Of Soundcloud
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.