Artists signed to Universal Music Group will receive payments from advertising when their songs are played on SoundCloud, the free streaming service used by an estimated 175 million people, which claims to be the "world's largest community of music and audio creators".
SoundCloud already has deals with Warner Music Group and Merlin, which represents several independent labels, as well as the National Music Publishers Association. Last May, the company claimed it had paid $2m in royalties to artists within a year of introducing adverts.
“We’ve got the majority of the music industry partnered with us now,” said Alexander Ljung, one of the founders of SoundCloud.
SoundCloud has hinted that it will introduce a paid subscription service later this year, but further details remain thin on the ground. The New York Times reports that Michael Nash, Universal’s executive vice president, has indicated that the deal would allow Universal to experiment with SoundCloud, including making some material available only to paying subscribers.