SoundCloud is currently working on a way to pay their top artists, and apparently these aren’t the only people getting a check. It looks like the major labels could get a considerable payout from SoundCloud in the future.
Why would Sony, Warner, and Universal protect their artists’ songs from unauthorized use, when they could get a piece of the pie instead? A piece of the pie that they wouldn’t have to share with these artists.
Bloomberg reports that the labels are approaching deals with SoundCloud, according to sources that asked to remain unidentified.
The labels would agree not to sue SoundCloud for copyright violation in exchange for a 3 to 5 percent stake in the company each. SoundCloud would also give the labels a percentage of future revenue.
This is similar to agreements the labels have made with Spotify and Beats Music, securing equity as part of licensing agreements.
Two sources said these agreements would value SoundCloud between $500 million and $600 million.
Nina Ulloa covers breaking news, tech, and more. Follow her on Twitter: @nine_u