News - 05/06/2015

SoundCloud secures deal with Merlin, opening the door to content from 20,000 labels

SoundCloud secures deal with Merlin, opening the door to content from 20,000 labels

SoundCloud has secured a very important deal on its road towards becoming a fully licensed service, that with global digital rights agency Merlin. 

The agency represents some of the biggest independent labels in the world including Beggars Group, Domino, Secretly Group, PIAS, Warp Records and more - and commands a 10% share of the global digital market. 

The agreement is significant because SoundCloud appeared to have been focusing all of its attention on getting its major label deals signed, which had caused some to question whether the company had forgotten its indie roots. Getting a framework agreement signed with Merlin is a significant step towards ensuring that a licensed version of SoundCloud won’t become a major’s playground but will continue to offer the type of content which gave the service an audience in the first place. 

Merlin’s Charles Caldas, commenting on the deal, stated: “The independent label community has long embraced SoundCloud as an innovative marketing and discovery platform, and Merlin is pleased to partner with the service at the next stage of its evolution. Our deal significantly extends this existing relationship, and ensures Merlin members can participate fully in the long term value of SoundCloud's future.”

The agreement means that Merlin members will be able to access what has been described as “a full range of reporting and content management tools”, which presumably extend beyond what SoundCloud has been offering premium members thus far, but most importantly it will enable them to participate in On SoundCloud - its creator partner programme. 

This means that the agreement with Merlin kicks off today and is not exclusively tied to SoundCloud’s upcoming music subscription service, even though that is also part of the deal as and when it is ready to launch.

It is worth highlighting that a deal with Merlin does not actually mean that SoundCloud has a deal with all 20,000 labels, but that those labels are able to opt into the deal if they choose to. Merlin’s endorsement is a fundamental step in that journey but SoundCloud’s team has a lot of work to do if it wants to ensure that all the big indies actually become part of it. 

Now the question mark on everyone’s minds is: will this lead to UMG and Sony budging and licensing SoundCloud’s service? Clearly the company has done something right by convincing Merlin, Warner and the NMPA to jump on board, but without the biggest majors it would be impossible for the company to launch a streaming offering. 

 

(Andrea Leonelli) 

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