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SoundCloud Plans To Change The Streaming Game Yet Again

The streaming service is negotiating a development of “paid tier” offerings

At this point, listeners shouldn’t get too familiar with how we consume music, because it can seriously change at any point.

Granted there’s still a percentage of throwback listeners that inflate vinyl and Record Store Day sales, but for the majority, hand-held is the way to go. With a surplus of music backdrop platforms taking subscribers to streaming services like Spotify, Apple Music and Pandora, SoundCloud remains as the most popular free streaming experience. And now there is an “opportunity for SoundCloud to create incredible revenue,” according to Universal Music Group chairman/CEO Lucian Grainge, as he recently explained at the WSJD Live Global Technology Conference.

Founded in 2007 by Swedish musicians Alexander Ljung and Eric Walforss, SoundCloud has easily become enormously popular with artists, DJs and music fans for its simple interface, social interactions, and deliverable speed of artist to fan functionality. However, the company has been operating without licenses from most labels, and its losses are increasing much faster than its revenue. Bewteen Novemebr 2014 and January 2016, the Berlin-based company signed agreements with Warner Music Group, Universal and Merlin, the independent-label agency, to most recently crossing the major hurdle with Sony Music.

At the moment, SoundCloud is negotiating a development of “paid tier” offerings to exist alongside its free offering, to launch in the coming weeks. "The SoundCloud agreement gives us the opportunity, with our artists, to have flexibility with respect to how we make music available to fans," Grainge told Billboard in January.

And, in a measure aimed at the dance music fans and musicians who offer a number of authorized remixes and DJ sets on both tiers, the new implementation will innovate new contracts that allow it to monetize content from the labels and publishers.

SoundCloud is ­hopeful the remix-monetization deals will help set apart the music platform, while ­maintaining the usability that has made it so popular.

"It's a very organic, user-friendly ­experience that's really social," says a major-label executive who has seen a ­demonstration that includes the paid tier. "It's true to the way SoundCloud works now."

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