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Warner Music Group strikes deal with SoundCloud

DLD Conference 2012 - Day 2
Alexander Ljung, chief executive of SoundCloud, said he expects a partnership with Warner Music Group to generate significant revenue for the record label’s artists in the months and years to come. Above, Ljung in 2012.
(Nadine Rupp / Getty Images)

Warner Music Group will license some of its vast music library to SoundCloud, becoming the first major record label to strike a deal with the audio-sharing website that is challenging YouTube and Spotify.

The partnership allows Warner to manage the availability of its content and to generate revenue from remixes of its music, the companies said Tuesday.  

Music fans often take several songs and splice them together to create a mash-up. Warner will receive a share of advertising revenue from these remixes in the same way content owners get ad revenue from YouTube when their material is uploaded by other users.

The agreement covers SoundCloud’s existing ad-supported model and its subscription service due for release next year.

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YouTube is also working to create a subscription service.

“SoundCloud is a platform built on music innovation and it has a rare ability to drive music discovery while enhancing the connection and collaboration between an artist and their following,” Rob Wiesenthal, chief operating officer for Warner Music, said in a statement.

SoundCloud has been pitching its two-month-old “On SoundCloud” program as a sort of new MySpace for independent musicians and labels. Through the program, artists pay to upload a large number of songs but also receive statistics about their audience and a share of ad revenue.

The label is the first major name among the 40 partners using On SoundCloud. The company didn’t announce which of its artists would be featured on the service. Warner’s roster includes Linkin Park, Skrillex and Trey Songz. 

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SoundCloud, based in Germany, launched in 2008 as an audio version of YouTube and has between 100 million and 200 million listeners each month.

Chat with me on Twitter @peard33


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