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SoundCloud Strikes Deal with PRS, Clearing Hurdle for Subscription Service Launch

Music streaming service SoundCloud has struck a licensing deal with UK-based music rights group PRS for Music, settling a lawsuit and in turn clearing an important hurdle on its way to launch a full-fledged music subscription service. Now, the company just has to get other rights holders back to the table.

PRS had sued SoundCloud for copyright infringement in August after negotiations between the two sides about a licensing agreement had broken down. The group, which represents the rights of over 115,000 songwriters, composers and music publishers in the UK, had been negotiating with SoundCloud for five years, according to its CEO Robert Ashcroft. “Many of our members love the SoundCloud service and I greatly appreciate their management’s willingness to work with us in the way they have,” he said in a statement released Monday.

SoundCloud founder and CEO Alex Ljung added: “We’re pleased to have reached an agreement that will expand revenue opportunities, improve the accuracy of royalty distributions, and launch new services for our 175 million monthly active listeners on SoundCloud in 2016.”

SoundCloud has been working for some time on launching a paid subscription service similar to Spotify or Apple Music. However, the company also wants to keep user-generated uploads, remixes and DJ sets on its platform. To this end, it has been looking to offer rights holders the ability to monetize user-generated uploads, similar to the way YouTube has been doing it in the video space.

The company already has licensing agreements with Warner Music as well as indie label group Merlin. Reports indicated that it was close to striking a deal with Universal Music earlier this year as well, but those talks reportedly stalled when PRS took legal action against SoundCloud. Resolving the lawsuit could help the company to expedite its other negotiations as well.

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