With word that the Warner Music Group has signed a licensing agreement with SoundCloud, portal officially becomes less of a portal for discovering new music, but now a wholly locked-in piece of mainstream music solving what has been—to date for major labels—a digital puzzle. As a DAD reader, you've been aware since June of this year that Universal Records has been not-so quietly flagging accounts with minimal (if any) communication with/from SoundCloud before material was removed. Producers like Kaskade, Lido, and Soulection's Joe Kay were vocal, but obviously Universal's work with SoundCloud was clearly a precursor to what has come to pass with Warner with this news. Warner received an ownership stake in SoundCloud as well.
Key to Warner finally inking an official deal was the fact that the company has made concessions to creating an ad-free premium subscription offering that will likely be available in 2015. SoundCloud has already begun rolling out ads on the service, but the "premium" option likely will be able to cover the costs of SoundCloud purchasing licenses in order to allow for labels to receive rights fees for per-stream usage of label-licensed material. However, with Warner now having an ownership stake in SoundCloud, those fees only serve to allow for Warner to assume ownership stakes in the company without any loss of potential dividends from their new corporate acquisition.
