Mixcloud has announced that it has entered into a licensing agreement with Warner Music Group, and is said to also be pursuing similar deals with both Universal and Sony Music as well. The company is known as a platform for podcasts, DJ sets and radio shows that include celebrity music artists, DJs and publications like Tiesto, Moby, Erykah Badu, David Byrne of the Talking Heads and The Guardian (including my Inner Circle podcast).
What this deal does is now allow Mixcloud to make money. Up until now, it couldn’t charge for the service without running afoul of a label or publisher if music was involved that wasn’t officially licensed. Mixcloud actually doesn’t plan on charging users for the services via a monthly subscription like Spotify or Apple Music though. It will instead allow each podcaster to charge an individual subscription price and it’s totally up to the podcaster to determine that amount.
One thing that’s interesting is that Mixcloud already has its own proprietary Content ID system that can identify individual tracks within the user generated audio, can track usage, and then pay out royalties to the various collection organizations like SoundExchange and the performing rights societies in the U.S. Considering that even the mighty Facebook has struggled with coming up with something similar, this is quite a feat.
The company has also taken a different growth approach than other tech companies in the music space in that it’s trying to make money first before gearing up for more users. The approach of scaling first then making money hasn’t been all that successful for other companies in the past, so it will be interesting to see what happens with Mixcloud as it goes forward.
Mixcloud, which was launched in 2008, currently has around 17 million listeners per month who tune in to some 12 million shows, DJ sets and podcasts, so its definitely become a big enough player that now has the major label’s attention. No one turns down a new revenue source, so it’s only a matter a time until the other majors, and GEMA (the indie label organization and what’s come to be the 4th major) make a similar deal.