SoundCloud’s 175 million users dwarf Pandora’s 76 million and Spotify’s 40 million. But unlike those digital music rivals, SoundCloud had done practically nothing to turn those legions of users into a real business. Now that’s starting to change with its first-ever major label deal, announced on Tuesday, with Warner Music Group.
The agreement doesn’t follow the pattern of previous licensing pacts between a label and a streaming service. Warner will get to place ads on some of its songs and then share the revenue with SoundCloud. About 40 bands and smaller labels are already doing this through a program SoundCloud launched in August, with brands like Sonos, Jaguar, and Red Bull advertising on the site.
