SoundCloud said to be offering equity to majors, what about the indies?

SoundCloud is closing in on licensing deals with Universal Music, Sony Music and Warner Music, according to a report published by Bloomberg quoting people familiar with the talks. 

The majors will reportedly get an equity stake in the company - between 3 and 5% each -  and the deal would value SoundCloud between $500 and $600 million. 

Majors would of course also secure a percentage of future revenues as part of the licensing terms.

The arrival of potentially millions of back-catalogue tracks on SoundCloud is bound to be viewed by its community with mixed feelings. The service has mostly been a springboard for single launches or album teasers. Few labels upload entire albums on it, never mind entire catalogues, so if it was to become a competitor to Spotify the UI would have to change drastically. 

This in turn would change the way the SoundCloud community operates, which could turn off some users.

In addition, since the service was at the very beginning aimed at music creators and a thriving community of independent musicians and labels formed around it that fostered its growth, there’s no doubt that the company will come under scrutiny for offering equity to major labels. 

How SoundCloud will deal with that backlash is going to be instrumental in maintaining the positive, music-friendly brand name that the service has today. It will come down to what terms SoundCloud will offer to independent labels and as to whether it may be willing to offer similar terms - including equity - to an organisation like Merlin that represents some of the biggest independent labels worldwide.

But leaving rumours and discussions about the future of SoundCloud aside the company has also just unveiled a new integration with Sonos. 

The premium wireless speakers company has added SoundCloud to its lineup of supported streaming platforms. Sonos recently unveiled a “universal search” function that allows users to search for music across a variety of services and that will now include SoundCloud. This is bound to be very good news for artists that are not yet available commercially on platforms like Spotify or Rdio but do have an active SoundCloud page.

(Andrea Leonelli)