The deal between the two companies has been signed off after prolonged negotiations.
UMG will look to monetise the streams of audio for its rosters—which includes artists like The Weeknd and Sam Smith—via SoundCloud's advertising system. The deal means that Sony Music and Sony/ATV are the only major labels not to have a deal in place with SoundCloud, a streaming website with more then 175 million monthly listeners. A subscription service is set to come into play in 2016, though no further details have been revealed yet.
SoundCloud founder and CEO Alexander Ljung says, "With this partnership with UMG we will further strengthen and grow the unique community we've built over the past seven years, where multiple forms of expression can live and where artists at every stage of their careers come to create and share their work."
Ljung adds: "Bringing together the world's largest audio platform and the world's largest music company means we are able to further expand SoundCloud's role as a critical platform for creators and open up its benefits to UMG's extensive roster of artists. With the majority of the music industry partnering with us, and adding to the more than 100 million tracks already available to discover on the platform, we are able to offer a service to both creators and listeners that is unrivalled in the music streaming space today."
Universal Music Group chairman and CEO Lucian Grainge says, "At UMG, we have long embraced empowering entrepreneurs and innovative services such as SoundCloud. With this partnership, we're ensuring recording artists, songwriters and labels benefit, both creatively and commercially, from the exciting new forms of music community engagement on SoundCloud. We look forward to working with SoundCloud and supporting the company's evolution into a successful commercial service."