Don’t Sue: SoundCloud and Warner Music Group Sign a Deal

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SoundCloud, the Berlin based music site with over 250 million listeners a month, is finally in talks with a major music label. Warner Music Group, the label responsible for subsidiaries like Atlantic Records (T.I, Trey Songz, Bruno Mars, etc) is the first major music corporation to strike a deal with SoundCloud, which will result in a subscription service, among other changes to the site’s function.

Last year, SoundCloud’s immense popularity with DJs, producers and music fans as a promotional platform got them in trouble with major labels over copyright concerns. Since then, many users have reported that their mixtapes and mashups have been removed from the site due to copyright infringement. The harsher restrictions that SoundCloud put in place to placate major labels against legal action were also coupled with with the first bids of equity made to groups like Universal and Sony.

Although these talks between Warner and SoundCloud have been private, this has not stopped people both inside and outside he companies from speculating. SoundCloud is striking a deal that would allow artists to earn revenue from “user-generated mixes and mashups,” according to FACT Magazine.

This would be a precedent for the music platform, but there’s a catch. According to sources, SoundCloud would offer percentages of the company to Warner, more involvement and promotion of Warner’s artists (possibly over the interests of independent artists and labels) and more ads being added to the site.

But this could also be a big break for the start up, considering that it already had two things going for it: a strong and very dedicated following around the world, and a team of engineers and programmers who understand the delicate balances between new technology, user satisfaction, and entertainment.

Warner’s deal could usher in a new era for SoundCloud users, which is set to be implemented in 2015.