SoundCloud Reaches Royalty Deal With 20,000 Record Labels

With its sleek design and easy integration with social media, SoundCloud has become one of the most popular sites for streaming music. But it has long had a tense relationship with the music industry because it lacked formal licensing deals, and so paid no royalties. For the last year SoundCloud -- which says 175 million people use the service each month -- has been under pressure from the industry to make those deals, with mixed results. While it signed up Warner Music, one of the three big labels, it has apparently reached an impasse with Sony that has led to that label removing music by some of its biggest acts, like Kelly Clarkson and Adele, from SoundCloud.

But on June 4, SoundCloud announced that it had struck a deal covering some 20,000 independent record labels through Merlin, an organization that represents small companies in digital negotiations. The deal covers some of the biggest and most influential independents, like Beggars Group (home to Vampire Weekend and FKA Twigs), Secretly Group (Bon Iver) and the electronic label Warp. The Merlin deal follows another SoundCloud arrangement announced in May with the National Music Publishers’ Association, which also covers a range of smaller companies. Publishers handle the copyrights for songwriting, which are separate from those for recordings.