SoundCloud has signed a deal with Merlin, the digital rights agency that represents more than 20,000 independent artists and record labels
This marks another step towards making streaming a significant source of revenue in addition to exposure for independent artists and musicians.
The Berlin-based music streaming service announced on Thursday, June 4th that it had signed an agreement with Merlin. It represents artists and labels such as Big Dada and Beggars Group, whose artists include Vampire Weekend; Domino; and Warp.
The ins and outs of the financial details of the deal were not disclosed at the time of the signing.
To date, most of the content on SoundCloud remains unlicensed. However, the streaming service signed a deal with Warner last year. This means it will be paying a portion of its revenue from advertising to the label and its artists. They are now extending this courtesy to independent labels.
As part of its effort to become a legitimate music streaming service, SoundCloud introduced advertising last year and has plans to roll out an advertising-free subscription service later this year. It has not yet struck a deal with the two other major labels, Universal and Sony. Merlin says it represents the most valuable set of rights outside the major labels.
Alexander Ljung, SoundCloud’s founder and chief executive, had this to say. “Independent creators have always been at the core of SoundCloud and with this partnership, we’re thrilled to extend new revenue-generating opportunities to thousands of independent labels.”
Charles Caldas, chief executive of Merlin, said the deal meant its independent artists’ members could benefit fully from SoundCloud’s future profitability.
The music streaming service, which was recently valued at $700m, has 175m monthly active listeners. Making it one of the most popular music streaming services on the market right now. One of its biggest success stories is the role it played in building the profile of the artist Lorde.
However, there are still many music industry executives who continue remain deeply sceptical. Mainly about whether free streaming services can generate enough revenue to reward independent artists and investors adequately. In May, SoundCloud reported that it had paid $2m in royalties to content partners.
SoundCloud has attempted to strike a balance between two points. Artists who value extending their audiences and pressure from labels to take down the copyrighted music. DJ mixes featuring elements of copyrighted music have been a particular source of contention and we’re sure that will continue to be an issue.
Last month, French DJ Madeon publicly criticised Sony. He has said that the company was taking his work down from SoundCloud against his wishes. Madeon tweeted: “Thank you SoundCloud for being such a great discovery platform over the past five years. Well done Sony for holding your own artists’ hostage.”
Do you think streaming can become a substantial source of income for artists in the future?