SoundCloud and Warner Music Group Deal For Subscription Service

SoundCloud announced Tuesday that it partnered with Warner Music Group to license its music, making Warner the first major record label to earn from the audio-sharing website.

The music subscription service will commence in early 2015 and will run through the "On SoundCloud" program, which was initially introduced in August to help artists earn from their work.

As part of the deal, the German audio-sharing website will pay royalties to Warner Music and Warner/Chapell Music, the company's publishing division, every time a song created by a Warner artist is streamed on its subscription service.

In addition, the artist will also be able to decide regarding the availability of the content of their creation, and will be paid every time the song is played, remixed, or mashed-up by SoundCloud users.

According to The Next Web, the move was a first for SoundCloud, since the site originally featured only indie artists and up and coming DJ's.

Currently, the website shares music to its approximately 175 million monthly visitors, for free.

Until the announcement of paying royalties this summer, artists and DJ's who want their creation to be on the website will have to pay SoundCloud a monthly fee, while labels and artists were not compensated for their creations that are being played in the website.

Meanwhile, SoundCloud Chief Executive Alexander Ljung told the WSJ that the website will still offer a free listening option to select songs, separate from those which allow users to choose from different levels of access to songs based on their chosen subscription plan.

Because of the partnership, SoundCloud is expected to receive massive revenue, while maintaining its reputation for playing unique music and mashups that the site has been known for.