Everybody has to grow up sometime, and for Germany-based streaming service Soundcloud, it appears that time is now. Broken first by the Wall Street Journal, Soundcloud announced today a new deal with Warner Music Group, marking its first licensing contract with one of the major music labels. Under the terms of the deal, the site will reportedly pay royalties to Warner for each song from Warner’s catalog that is streamed on the ad-supported version of the site, as well as working towards a deal for a piece of each song played on Soundcloud’s forthcoming music subscription site.
Warner Music Group has signed a deal to license its music to SoundCloud Ltd., the companies said, making Warner the first major record label to start earning money from the German audio-sharing website. SoundCloud will pay royalties to both Warner Music and its publishing division, Warner/Chappell Music, each time one of the songs they’ve opted to monetize is streamed on its free, ad-supported service, as well as for songs played on a new subscription service, according to a person familiar with the matter. SoundCloud plans to launch the subscription service in the first half of next year, said SoundCloud Chief Executive Alexander Ljung. The record company’s decision to sign the deal had hinged upon the guaranteed launch of the paid subscription service, which will likely offer consumers different levels of access for different monthly prices. SoundCloud will continue to offer a free listening option as well, Mr. Ljung said.