SoundCloud has announced its first major label partnership as part of its upcoming On SoundCloud service.
The Berlin-based company has signed a deal with Warner Music Group to generate royalties for its artists from plays of their work on the platform.
Users will have the option to use an ad-funded service or a paid-for subscription to listen to music – much like Spotify’s model. Talks are reportedly ongoing with Sony Music and Universal.
“We’re thrilled that Warner Music Group will be the first major label to join our new creator partner program,” said SoundCloud’s founder and CEO Alexander Ljung in a statement. “We expect to generate significant revenue for Warner and its artists in the months and years ahead as we roll out an ad-supported offering and subscription service that delivers real value to the industry.”
It’s currently unclear how smaller labels and artists will be able to sign up to the ‘creator’ program, and whether they will be able to earn royalties from the service as soon as the majors can.
SoundCloud is under pressure from its investors to start earning more money soon, after having made a loss of $23m in 2013 from total revenues of $14m.