New SoundCloud pact ramps up rivalry with Spotify, Pandora

SoundCloud has struck a long-awaited licensing deal with Universal Music Group, bringing the rising music-streaming service into closer competition with Spotify and Pandora.

Universal, home to Justin Bieber and Taylor Swift, announced a deal on Wednesday that will give SoundCloud’s 175 million users access to its song catalog. The Post first reported Monday that a deal was imminent.

SoundCloud allows any amateur musician to share their songs and content around the Internet. However, some users have been remixing and using copyrighted songs without permission, irking the record labels.

Another issue for the music majors is how much revenue can be generated from such activity.

Under pressure from the music industry, SoundCloud has committed to creating a paid tier and will also share ad revenue from highly trafficked videos.

The company, based in Berlin, Germany, signed a deal with Len Blavatnik’s Warner Music Group to license content more than a year ago. Sony Music has yet to agree a deal.

Under the deal, Universal, the world’s biggest record company, will gain a small equity stake in SoundCloud, along with access to SoundCloud’s user data.

“We have long embraced empowering entrepreneurs and innovative services such as SoundCloud,” Universal CEO Lucian Grainge said in a statement.