SoundCloud Signs Deal with Indie Giant Merlin

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Daniel Kessler of Interpol performs onstage during day 1 of the 2015 Coachella Valley Music & Arts Festival (Weekend 1) at the Empire Polo Club on April 10, 2015 in Indio, California.  

The deal comes ahead of a planned subscription service and a more ambitious, longer-term goal.

Independent label organization Merlin, which represents over 20,000 independent labels, has signed a contract with SoundCloud to join the company's On SoundCloud program, the London-based organization announced today.

The deal will allow Merlin's members, including Beggars Group (including Matador, 4AD, XL), Domino, Secretly Group (Numero, Jagjaguwar) and many, many others to monetize the revenue from uploads to the service through advertisements (though these have been slow to appear on the service). It will also provide those members access to a richer set of data analytics, as well as the ability to remove infringing content from the service.

"We've gone through three chapters," SoundCloud CEO Alexander Ljung tells Billboard, "originally building out tools for artists, then second phase was creating more tools to reach more listeners, and the third chapter is to offer creators options to monetize their work." Ljung says that the On SoundCloud program currently has around 100 partners, but aims to provide its service to any uploader, growing out of its current invite-only state. "It's a program for every creator out there -- eventually -- and will be useful for all of them."

“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 exciting stage of its evolution," Merlin CEO Charles Caldas said in a statement. "Our deal significantly extends this existing relationship, and ensures Merlin members can participate fully in the long-term value of SoundCloud's future.”

SoundCloud's broader goal is to legitimize all user-uploaded content, a large portion of which is the service's innumerable DJ mixes and remixes, most of which contain the work of other artists. ""We're getting closer to being able to monetize user-generated content, with this deal," Ljung says. "We're on a path to figure out how we can really look out for what creators want to do with their content, but also open up the possibilities of user-generated content as well. We want to clear that part up."

"Everybody i know at least wants to see that happen," says Ljung, referring to the perennial problem of bringing remix culture above ground. "From creators to listeners to remixers -- it's there and its part of contemporary culture."

On SoundCloud was launched last August. “This is where we start to figure out how to generate revenue and help our creators make money in order to enable them to build careers with us,” Chief Business Officer Jeff Toig told Billboard at the time. Other companies that have signed to the On SoundCloud program are Warner Music Group, the National Publishers Association, as well as launch partners Funny Or Die, Sony/ATV, and others.

The company has yet to launch its paid subscription service, though Ljung says its launch, delayed since 2014, will be announced later this year.