London-born streaming startup Mixcloud has inked a milestone deal – a direct licensing agreement with Warner Music – which will enable it to start building new subscription products.
SoundCloud rival Mixcloud attracts around 17m monthly users. It hosts 12m radio shows, podcasts and DJ sets which have been uploaded by more than a million ‘curators’ – including the likes of Carl Cox, Moby, Erykah Badu and David Byrne.
The service, which was founded in 2008, now says it is negotiating with Universal and Sony in a bid to tie up licensing deals with all three majors.
It has previously relied on statutory radio licenses for its music usage.
The expectation is that direct deals like the one struck with Warner will allow Mixcloud to offer more on-demand services to listeners – and charge for them.
MixCloud co-founder Nico Perez told the Financial Times: “We don’t want to do the $9.99 a month. That’s done. That market is served. What we’re building is going to be very customised.”
The FT reports that ‘details of [Mixcloud’s] subscription product are still being worked out’, but that it won’t replicate Spotify‘s $9.99-a-month all-you-can-eat approach.
Last month, Nikhil Shah, Co-Founder and Commercial Director of Mixcloud, wrote in an op/ed for MBW: “[We believe] more streaming music companies ought to be built and managed in a responsible way.
“A lean team, careful management of costs, and effective monetization of the platform can go a long way in keeping streaming services afloat.”
He added: “Silicon Valley often preaches “scale first, revenue second.” This is simply not the right approach in music.
“It’s not fair for creators and creates too much risk for young companies, which in turn imperils the creators who feed them.”Music Business Worldwide