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Soundcloud to Launch Paid Subscription Service After Signing Deal With Universal

by William Hoffman   Jan 13, 2016 23:45 PM EST

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Apple Music, Tidal and YouTube Music all launched music subscription services in 2015. Now Soundcloud is preparing the debut of its own paid service.

The New York Times reports Soundcloud has struck a deal with Universal Music Group that will provide advertising revenue to Universal Group's roster of artists, which includes huge hit makers such as Nicki Minaj, Sam Smith, Lady Gaga, The Weeknd and Kendrick Lamar.

Soundcloud has long fought the major labels over a deal that would secure licensing for artists to make money on the highly popular music streaming service. The deal allows Universal artists to collect royalties on streams from the free service's 175 million monthly active users around the world.

To put that in perspective, Spotify boasts 75 million users, 20 million of whom are paying. Apple Music recently reported it has 10 million paying users. However, by far the largest music streaming service continues to be YouTube.

Soundcloud already has deals with indie labels such as Merlin, Warner Music Group and the National Music Publishers Association, but Universal is the first major label to back the streaming service.

The lack of major-label backing hasn't hindered Soundcloud's growth thus far, mainly because the service has cultivated a strong community of DIY creators who just want a platform to share their music with as many people as possible without interference. It's the platform on which last year Drake released his Meek Mill dis tracks "Charged Up" and "Back To Back," and this year it's the vehicle for Kanye West's Good Music Fridays SWISH album roll out.

Of course, this means more ads overall on artists under the Universal Group umbrella or not, but nothing is truly free.

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