SoundCloud, which has been rumoured as an acquisition target for Twitter, is understood to be close to signing licensing agreements with Universal Music Group, Sony Music and Warner Music.
The record labels are interested in getting a stake in the audio site, which has 250m listeners a month in return for not suing SoundCloud for alleged copyright violations.
According to Bloomberg, SoundCloud is in discussions with the labels whereby each label would acquire a 3pc to 5pc stake along with a percentage of future revenue.
Such an agreement would value SoundCloud at between US$500m and US$600m.
SoundCloud is a platform for musicians and podcasters who want to share audio across devices, websites and social media platforms, and achieve maximum impact.
Sound designer Alex Liung and artist Eric Wahlforss founded the Berlin-headquartered company in 2007 to enable musicians to share audio.
One of the key features of SoundCloud is it allows artists to upload their music or podcast, create a distinctive URL and embed their audio file anywhere they choose.
Twitter apparently was interested in acquiring SoundCloud in recent months.
The social network is believed to have backed out of talks to buy SoundCloud with speculation pointing at SoundCloud’s lack of licensing agreements to stream music as the main reason.
SoundCloud logo image via Shutterstock